Standard & Poor's Just Made Your Mortgage Cheaper

There was a great article from Peter Martin (Economics Editor, The Age) summarising what (global credit rating agency) Standard and Poor's will mean to our interest rates:

It clearly stated; The bank has room "to lower policy interest rates from their current level of 1.75 per cent to support growth"

The RBA board next meets on August 2. It's now extremely likely to cut its cash rate again on that date, to 1.5 per cent, in anticipation of what Standard & Poor's will make the government do, and then to cut it again.

The threat to our credit rating means that from now on, the government will taking more of the responsibility for fixing the deficit and the Reserve Bank more of the responsibility for managing the economy.

There you have it, clearly keeping stable footing under the property market, with interest rates still heading lower.

When you have a look at where the futures market has its view on the direction of interest rates:

While we're on the topic of Standard & Poor's - I thought it relevant to have a quick look at what the S&P/ASX 200 has done over the past 10 years.

The S&P/ASX 200 is recognized as the institutional investable benchmark in Australia. The index covers approximately 80% of Australian equity market capitalization. Index constituents are drawn from eligible companies listed on the Australian Securities Exchange.

On Friday 3rd of July 2006, this index stood at 5,135 points.

As of today, that same index stands at 5,227 points!

On the other side of the coin, if we have a look at what property prices have done across the same period, you will see a marked difference:

Property Club members have ridden the wave of this growth, with 5,000+ members in our Millionaires Club!

Property Club members are having a lot of success with Club research assisting them to acquire a residential property portfolio, that will give them more choices in retirement!

Make sure you contact your Property Mentor to assist you to catch the wave as well!

Have a great weekend and catch you next week!

Warm Regards,

Troy Gunasekera National Manager Property Club