5 years ago, who would have thought that the outcome of a referendum in Greece could have a big impact on your home loan interest rate? It's quite likely that this will be the case. If Greece decides to go it alone and opt out of the euro, the ramifications could well be felt here. Which way would rates go? Good question - money markets may tighten up again and funding costs increase, pushing up rates OR the global economy could take another hit and the Reserve Bank may decide that, as inflation seems to be under control in Australia, reducing interest rates will stimulate domestic spending. We're leaning towards the latter option as Christmas approaches and retailers are still doing it tough. Job losses aren't the ideal way to start a new year, and cutting interest rates is one sure way to keep shop assistants in their jobs.
What do you think?
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