Rates tipped to drop
IF WESTPAC senior economist Paul Evans is on the money, home owners can look forward to the lowest interest rate since figures were first published in 1990.
Evans predicts the official cash rate, set by the Reserve Bank of Australia and currently at 3.75%, could drop by as much as 100 basis points - down to 2.75%.
This would be a record low, with the lowest cash rate recorded in April 2009 in the height of the Global Financial Crisis (3.00%).
Westpac is the only one of the big four banks to suggest such cuts would take place, despite reports at the beginning of the year suggesting that rates would increase.
The Commonwealth Bank, National Australia Bank and ANZ have stated throughout the year that they expect interest rates will increase at least once.
Evans indicated that he believed the RBA wouldn't cut the rates in one go, instead suggesting that the cash rate would be lowered by 25 basis points every few months.
The Reserve Bank board will meet this Tuesday morning, with an official announcement at 2.30pm the same day.
Any rate cut would be a big welcome to mortgage holders, as the rising cost of living continues to put immense pressure on families' finances.
