Interest rates on hold and first home buyers benefit!

The Reserve Bank has delivered mortgage holders some relief today by deciding to keep rates on hold until at least February.

The decision comes on the back of economic data out last week showing that the growth in the Australian economy has fallen behind many of the world’s advanced economies. Consumer data out last week also showed the biggest drop in retail sales since July 2009.

“Today’s move is good news for mortgage holders who are adjusting to the higher rates imposed by last month’s official rise coupled with the decision by several lenders to lift their own rates by quite a lot more,” says Domain.com.au blogger Carolyn Boyd.

Rates will now remain on hold until at least February, as the Reserve Bank takes a break in January.

First home owners will also benefit from an increase in the First Home Owner grant with the current cap being increased to $835,000 from 1 January 2011. The $835,000 cap will apply to applications where the commencement date of the eligible transaction is on or after 1 January 2011. The commencement date of the eligible transaction is the date of the contract to purchase or build a home or, for a builder, the date the foundations commenced to be laid.

Applicants who purchase or build a home which has a total value of more than $835,000 are not eligible for the grant.

The previous cap of $750,000 still applies where the eligible transaction commencement date falls between 1 January 2010 and 31 December 2010 (inclusive). Prior to 1 January 2010 there was no cap.
For eligibility criteria and other First Home Benefits go to www.osr.nsw.gov.au/benefits/first_home