FOR some Border homeowners, the Reserve Bank’s interest rate cuts won’t make any difference to their mortgage repayments.
East Albury couple Peter and Nicole Cornell say, if anything, yesterday’s 0.25 per cent cut is a short-term fix to a bigger problem and not an early Christmas present.
“Interest rates won’t stay low, they’ll go back up,” Mr Cornell said.
“Everything is going up — cutting interest rates by a quarter of a per cent, it’ll give a little bit of consumer confidence but in the wrong areas.
“I think if the banks pass on even .1 of a per cent it will be miraculous but I really doubt that they will.
“There might be a few extra dollars in the bank account but something else will come along and eat it up.”
The couple, who own a small transmission business, said the key was in buying what you could afford.
“You can’t rely on interest rate cuts to keep yourself afloat,” Mrs Cornell said.
“Anything extra we get will be going towards things like electricity and whatever else.”
Hume Building Society chief executive Andrew Saxby said his bank would decide on Monday whether it will pass on the cuts.
“Our approach is to start modelling on what we can afford to do and what we have to do in terms of deposits,” Mr Saxby said.
“Although people with home loans and credit cards will be encouraged by the cuts, about 0.5 per cent of our customers who save with us will be thinking ‘oh goodness what’s going to happen’, so we need to balance out the needs of our customers who save and who borrow.”
WAW Credit Union chief executive Peter Challis said the cuts worried investors.
“The third of our customers who invest are starting to get less and less back,” he said.