Australians are in the dark about the official cash rate despite it reaching record lows, says comparison website Finder.
The official cash rate dropped to 1.0% in July after the Reserve Bank announced its decision to reduce the rate for a second time in consecutive months. But a survey by Finder shows 86% are oblivious to the new rate. Bessie Hassan, money expert at Finder, says knowing the cash rate is crucial.
“Even the smallest change to the cash rate can end up saving you tens of thousands of dollars,” she says. “If borrowers fail to keep tabs on cash rate movements, they could be missing out on a golden opportunity to save big money by either negotiating a better rate, or looking elsewhere.” The research found that 56% think the cash rate is higher than it is, with 13% assuming it to be between 5% and 10%. Just 10% of women and 18% of men could identify the correct cash rate.
Hassan says economic ignorance is costing Australians. “Keeping informed means knowing which direction rates are going,” she says. “Take a look at your interest rate and compare it to what’s being offered. If it isn’t up to scratch, it may be time to refinance.”