Rates Cuts - Winners & Losers
02 December 2008
Statement by Mr. Chris Atkins, Executive Director, Master Builders Tasmania
The official cash rate is now down to 4.25%, the winners; the banks and those with a mortgage or contemplating entering the housing market, the losers; businesses financing loans at a time of a global squeeze on credit, according to Master Builders Tasmania, the peak employer body representing the building and construction industry.
Mr Christopher Atkins said, “Where financial institutions pass on today’s interest rate cut in full, when combined with the other recent cuts, struggling families will have a significant amount of extra cash in their pockets. Those with an average home loan of $199,300 will be around $289.00 per month better off than they were three months ago. The cuts will have a positive impact on those contemplating purchasing or building a new home, as housing has become increasingly more affordable in Tasmania. Banks are benefiting by around $98.00 per month, per home loan, as they have not passed on the full amount of the recent rate cuts.”
Mr. Atkins continued, “Businesses have been overlooked by the banks as the interest rates on their loans have not enjoyed the same cuts as mortgage holders. In fact, up until today, banks have only decreased business rates by 0.7%, whilst official rates have gone down by 2.00%. In the midst of a global credit squeeze businesses are doing it tough. Where credit and interest rate relief is not passed onto this sector, jobs will be lost. Employees without any income can’t service mortgages. Banks must ensure they pass these rate cuts onto businesses to ensure continuity of employment and to add further stimulation to the economy.”
C. Atkins
Executive Director
For further details contact: Chris Atkins (03) 6234 3810 Mob. 0438 623 438
