Reserve Banks decision will help home loan payers

The decision of the Reserve Bank to maintain the cash rate - affecting the amount of  is paid to savers, as well as , at the same level is likely to help property owners with , it has been said.

Treasurer Wayne Swan has told the Australian public that they can breathe a sigh of relief as their mortgage payments will not rise this month.

Earlier today (May 3rd 2011), the Reserve Bank decided to leave the cash rate at 4.75 per cent when it met for its monthly board meeting.

This is the same level it has been since November 2010 and it means that those with home loan deals can expect their monthly payments to remain low.

The Sydney Morning Herald has reported Mr Swan as saying: "An average family with a $300,000 mortgage is still paying nearly $160 less each month in repayments than they were when we came to government."

He noted that this will amount to a saving of $1,880 over 12 months, which is likely to be valuable as the cost of living continues to rise in the nation.

Last week, the JP Morgan-Fujitsu Australia Mortgage Industry Report, published by ABC, revealed that there are falling levels of disposable income among property owners.

As well as making the ability to save money in best accounts in order to purchase a house more difficult, banking analyst at Fujitsu Martin North noted that the amount spent on servicing their loans has increased to nearly half of their disposable incomes.

The Reserve Bank's decision comes after four rate rises last year, with chief operating officer at Loan Market Dean Rushton saying these are continuing to have a significant impact on those with their assets tied up in loans.

He told the Springfield News: "Any rate increase in the near future would only result in a serious setback to consumer sentiment."