Understanding Inflation: What It Means for You and Your Mortgage”

Imagine inflation as a sneaky force that affects how much things cost and how far your money goes. For Australians, it’s like a silent player in the game of money, influencing everything from groceries to mortgage rates.

Now, the December quarter inflation numbers are about to be revealed, and experts think something interesting is happening. They say the yearly inflation rate is likely going down to 4.3 per cent. This is good news, especially for people with mortgages and those feeling the squeeze of high living costs.

Last year, one big reason things got more expensive was petrol. It cost more for the average Aussie and for companies transporting goods around the country. This meant higher prices at the supermarket too.

But there’s a silver lining: oil prices, which affect petrol costs, dropped by 20 per cent in the December quarter. That meant petrol prices went down too.

For Aussies, who spend a lot on petrol every week, this is a relief. With petrol being such a big part of their budget, the expected drop in inflation is a positive sign.

In the previous quarter (September), inflation was at 5.4 per cent, showing how tough things were for many households. But the December numbers are looking better, with experts predicting a decrease to 4.2 per cent. This means less financial stress for people struggling to keep up with rising costs.

For homeowners with mortgages, this change in inflation is important. Inflation affects interest rates, which in turn affect mortgage payments. As inflation goes down, there’s a chance that mortgage rates could stabilize or even drop, which would be good news for homeowners.

However, it’s essential to stay cautious. Economies can be unpredictable, and things can change quickly. So, it’s important to keep an eye on your finances and mortgage payments, even when things seem to be improving.

In short, the expected drop in the inflation rate brings hope for Australians facing tough financial times. As petrol prices come down and inflation eases, there’s a chance for more stability. But it’s crucial to stay smart and careful with money, especially when dealing with mortgages and uncertain economic times.

Vinod Manuel – Mortgage Assistance