Interest rate commentary

The market is expecting a drop in interest rates by the end of 2024. We’re talking about the
RBA possibly cutting rates down to around 3.75% p.a, a drop from the current 4.35%. This is
big news for anyone in the mortgage game!

The RBA’s “hawkish rhetoric” under the new Governor Bullock, has underpinned the AUD
which has laid the foundation for these cuts. If she keeps this up, we could see those rate
cuts everyone is talking about.

Here’s our view: the rate cuts might not happen as soon as some are predicting. Our guess is
later in the year – third or fourth quarter. The RBA is likely to wait and see that inflation is
really under control before they pull the trigger on rate cuts. With everything from wages
rising to higher rents and costs from the construction boom, they’ve got a lot to keep an eye
on.

We need to understand how these potential rate changes could impact our mortgage plans
and investments. For now, we view it as a heads-up to start thinking strategically about your
next move.

Falling interest rates present an opportunity for borrowers to consider refinancing their
mortgages to secure lower rates, potentially reducing their monthly payments. Mortgage
brokers can play a key role in advising clients on the best time to switch from fixed to
variable rates, maximizing savings in a declining rate environment. It's also a prime time for
mortgage brokers to guide clients towards strategic financial decisions that align with their
long-term investment and housing goals. As we all know, when interest rates fall, investing
in certain products like bonds or real estate can be smart, as they often gain value and offer
higher returns in such an environment. Locking in these investments during low-rate periods
can maximize earnings as the market shifts.

At Blossom, we’re constantly fine-tuning our strategies to embrace market changes,
ensuring our offering remains a strong, reliable choice for investors seeking consistent
returns.

Nothing in this article should be construed as being personal financial advice. It is general in nature only
and has not taken into account your particular circumstances, objectives, financial situation or needs. You
should consider whether the information, strategies and investments are appropriate and suitable for you
or seek personal advice from a licensed financial planner before making an investment decision. Past
performance does not indicate future performance. BlossomApp Pty Ltd (ABN 74 644 216 151) is a C.A.R.
(No. 001284228) of Gleneagle Asset Management Ltd (AFSL 226199). Please consider the PDS and TMD
available at www.blossomapp.com to ensure the product suits your needs.