The Reserve Bank of Australia is scheduled to announce its next cash-rate decision on Tuesday 29 September at 2:30 pm AEST, which is 12:30 pm in Perth. The cash-rate target is currently 4.35%.
Before changing your property search or offer range, check the numbers that actually determine what you can borrow and what you can comfortably repay.
1. Get your borrowing assessment refreshed
Ask your lender or broker to confirm the interest rate, assessment rate, loan term, income, expenses and commitments being used. A pre-approval can become stale even when the cash rate has not changed.
APRA currently requires banks it regulates to maintain a minimum mortgage serviceability buffer of three percentage points. That is an assessment setting, not an extra three percentage points charged on your loan.
2. Test the household payment, not only the lender limit
Your maximum approved loan and a comfortable household budget are different numbers. Include council rates, insurance, maintenance, strata costs where relevant and a sensible cash reserve.
3. Reconcile the cash you actually need
Separate the deposit from transfer duty and other transaction costs, immediate repairs or improvements, and the reserve you want to keep after settlement. Borrowing capacity does not equal purchase-price capacity.
4. Wait for the actual RBA decision and your lender’s response
The cash rate is not your home-loan rate. After the RBA announcement, check the official decision first and then confirm what your lender changes, when it takes effect and whether it applies to your proposed loan. Do not change an offer simply from a headline.
Kixstart Property will update the numbers after the RBA releases its decision.
If you want help defining the property side of a Perth purchase brief, contact Kixstart Property. A lender or appropriately licensed broker should assess the finance.
General information only. This is not personal financial or credit advice, a forecast, a product recommendation or an offer of finance. Obtain advice suited to your circumstances and confirm figures with your lender or broker. See our website disclaimer.
Sources: Reserve Bank of Australia calendar; RBA cash-rate target; APRA macroprudential policy settings.