As it alluded to in its May Monetary Policy Statement, the Board of the Reserve Bank of Australia (RBA) lifted interest rates again at its June meeting. The decision itself was not surprising but the actual basis points did leave some taken aback. The RBA lifting rates again in June will flow into the motorcycle loans sector and have buyers on a search to achieve the cheapest interest rate loan. Those already with motorbike loans may be concerned about how the June increase and any further rate hikes may change their loan repayments.
The 0.5% amount did raise a lot of eyebrows as most analysts expected a 0.25-0.4% rise. Only a handful of times has the central bank raised the official cash rate by such an amount in several decades. The decision on rate hikes is of course to dampen inflation which hit 5.1% in the March quarter, over the previous 12 months.
The June decision raises the cash rate to 0.85% and banks and lenders will follow with increases across the lending markets. The cash rate forms a foundation from which lenders set their rates. The major banks were quick to pass on the increase. We will also see this reflected in motorcycle loan interest rates.
However, Jade Bike Loans will continue to source the cheapest possible motorbike loan interest rates for our customers. We are accredited with multiple lenders, which allows our consultants quick, efficient and professional-level access to source the lenders offering the best rates at any one time.
Prior to the May 2022 rate rise, the RBA had not lifted the cash rate for over 12 years. So this is new territory for many loan seekers. To ensure those seeking motorcycle finance understand the scenario we provide the key points around the latest RBA decision and ways that loan applicants may still achieve the lowest rates on the market to suit their requirements.
RBA June Board Statement
Decisions on the cash rate are made by the RBA Board at its monthly meetings. Following each meeting, the decision is announced via a formal statement. This sets out the decision, the reasons behind the decision and provides some insight into the RBA’s outlook and possible future intentions.
Key take-outs from the June statement include:
- Australia’s inflation rate remains lower compared with many advanced economies.
- Inflation rate is higher than the Board’s expectations made earlier.
- Global issues including COVID-relate disruptions in supply chains and the war on Ukraine are contributing to rising inflation.
- Issues in Australia including floods and the labour market are impacting price rises.
- Inflation in what the RBA described as ‘near term’ is anticipated to be higher than expected in last month’s statement. Prices rises in petrol, gas and electricity are given as impacts.
- Expectation is that inflation will now increase further prior to falling to the 2% to 3% vicinity in 2023.
- The rise in the cash rate will assist in the return of the inflation rate to the rate targeted by the central bank, over time.
- As global issues resolve and supply chains stabilise, inflation is expected to moderate.
- Australian economy exhibiting resilience with 0.8% growth in March quarter and across the year, 3.3%
- The labour market is very strong as is seen in the lowest rate of unemployment in the past 50 years at 3.9%
- Wages growth expected to improve as a result of businesses in competition for labour in the tight market.
- Uncertainty around the outlook in regard to the response of household spending to rising prices due to inflation.
- Future actions by the RBA Board will be made while take a close look at the global scenario, consumer spending, energy pricing, commodities prices and additional data.
This rise in the cash is a further step in the process of withdrawing the extraordinary support through monetary policy provided to the economy during the COVID-19 pandemic. It is expected that further steps in normalising monetary conditions will be made in future months. The size of any further rises will be based on data, inflation and the labour market and the outlook.
The next meeting of the Board of the RBA in regard to interest rates is scheduled for Tuesday 5 July.
Motorcycle Loans Outcomes
For motorcycle loan holders that secured their loan with a fixed interest rate, there would not be any change in the rate on that loan and therefore no change in the monthly loan repayments. For those that have variable interest rate loan, the lender may increase the rate as a result of the RBA decision and this would flow through to an increase in monthly repayments.
Jade Bike Loans secures our most popular loan – Secured Motorcycle Loan, at a fixed interest rate so the loan is not impacted by interest rate changes.
Those seeking a new motorcycle loan, the rate rise will place greater importance on getting that cheapest rated loan. We can assist in that regard by handling the sourcing and negotiating the cheapest rate from across our vast lending panel.
Loan applicants can also help themselves in achieving a better rate by maintaining a good credit profile.
With costs of living pressures affecting many budgets, our consultants continue to work with customers on an individual basis to structure motorcycle loans to achieve repayments that are achievable and doable across the full term of the loan.
To discuss achieving a better interest rate motorcycle loan, contact Jade Bike Loans at 1300 000 003
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA ARE PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
