Interest Rates Set To Drop To Record Low

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The Prime Minister has urged banks to pass on the full cut.

Mortgage holders are hoping economists are right in predicting the Reserve Bank Board will slash interest rates to below one percent today. 

The official cash rate is tipped to be reduced .25% to a record low .75% in a bid to stimulate the economy.  

We'll find out the RBA's decision at 2.30pm AEST and if there is a drop, it'll be the third this year.  

Prime Minister Scott Morrison has put the banks on notice telling them to pass on any cut in full:

"I would want banks to fully pass on any changes that were made - if they are indeed made - but I don't think there's any certainty about that question," Mr Morrison told reporters.

It'd see households with a $400,000 mortgage pay around $50 less a month on repayments. 

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The cut is expected because the latest economic data shows the Australian economy is slowing down, even though Treasurer Josh Frydenberg remains constantly upbeat.

"We've seen our interest rates come down quite substantially, so too the interest rates right around the world," he told Sky News on Monday.

"The impact of that has been to help stabilise the housing market, where clearance rates are now above 70 per cent in the major markets of Sydney and Melbourne, whereas they were around 50 per cent this time last year."

Source: AAP

Image: AAP / Bianci Di Marchi

Written By Ange Anderson

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