These are the things I know…
The great race starts at 3pm Melbourne time.
It’s raining in Melbourne today, and the track is already rated a soft 7.
More rain is expected — maybe just before, during, or after the race — so the track could be downgraded even further.
There are quality horses from all over the world, many of whom have never raced in Australia, against competitors they have no exposed form against.
If you feel the need to spend some money around 3pm Melbourne time, my most sensible advice is this: buy yourself a nice glass of wine, champagne (or a fizzy drink), and simply enjoy a great piece of Australiana.
There’s another event today…
The Reserve Bank meets just before 3pm Melbourne time.
And there are a few things I know about that, too.
Inflation has pushed back above the RBA’s 3% target range. There will be no rate cut today.
Of this I’m also reasonably certain…
We have a government — one we elected — with a clear mandate to transition away from fossil fuels.
True, they once promised cheaper electricity. But here’s the reality: if you spend $20,000 installing solar and a battery at home, your bills will go down — eventually. That $20,000 is still capital that needs to be paid for and recovered over time.
Things will become cheaper in the long run, but not initially — because of the cost of that borrowed capital.
The same applies to our country. We’re almost certainly heading into a period of higher energy costs and sustained inflation.
Electricity, which once made up about 15% of the cost of a supermarket item (say, a bottle of wine), now accounts for around 33%. That’s baked-in inflation.
So, on Melbourne Cup Day — what does this mean for your home loan?
Set your budget.
Allow me to continue managing your rate reviews every six months, as I always do.
It’s possible we’re at the bottom of this rate-cutting cycle — or at least at the start of a period where rates remain fairly stable.
And stable is good for planning. Enjoy the race if that’s your thing — and adjust your life around your current home loan.
Alan Heath – Ask Alan Mortgage Brokers Brisbane