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Interest Rate Cut On The Cards - What Does It Mean For Us?

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The Reserve Bank of Australia (RBA) is widely tipped to drop the cash rate at its monthly board meeting on Tuesday.

It was also expected that we would see the cash rate fall last month, but instead it remained on hold at 1.5 per-cent.  

RACQ Bank said any cut would spell good news for Queensland homeowners.

CEO Michelle Bagnall said if the cut occurred home loan rates were expected to follow, helping ease living pressures on Queensland families.

“If the RBA cuts rates today that’s a really good thing for Queensland households,” Ms Bagnall said.

"What it will mean is about roughly $50 per month back in their pockets, now that's on an average home loan of about $340,000" she said.  

Ms Bagnall also said her advice for people with a home loan is to "shop around" whether or not rates go down or stay the same.  

She admits "it's been a bit challenging for a little while for first home buyers to get into the market so  rate cut today [Tuesday] would actually be a little bit of a bonus for first home buyers".  

Her advice for those people is to not only make sure their loan is right for them today, but also tomorrow and into the future when rates happen to increase again.  

Ms Bagnall added that if the cash rate does fall below 1.5 per cent that would be bad news for people with deposits.  

For self-funded retirees she recommended they "shop around" adding "make sure, for those of you who retire on those deposits as income, that you're shopping around as much as if you're looking for the best home loan on the market". 

By Michelle Price