So another Reserve Bank meeting goes by and this time there’s been no rise in official rates. That was the good news from this week and many readers will breathe easy. However, whilst the RBA governor Glenn Stevens has shown restraint in leaving the rate at 4.5 per cent – his comments show that it could have fallen either way.

Many economists believe Stevens is prepared to wait until the September CPI figure is released on October 15.

The CPI tells us where inflation is heading, and his response will be felt in November. Right now, with inflation edging up and good economic growth, there’s a greater than fifty per cent chance that we’ll see a rate rise in November.

This won’t seem right to some readers: over the course of the Global Financial Crisis we’ve had multiple rate rises, and it looks like we have more to come.

Which suggests the RBA is keeping a lid on economic growth. Yet when I travel around Australia, and talk to householders and small business owners (who’ve all got mortgages to pay), I’m not hearing stories of an overheated economy that needs to be cooled.

The resources boom in the desert has not been felt in the heartland. Whether it’s a business owner in Rockdale or a home owner in Oakleigh, I’m hearing how hard things are.

It’s as if the GFC has been dealt with on a national and banking level, but its effects are still strong on the high street.

However, if I’m right about rates increasing in November, that provides only one month of respite. What can you do?

Take control of your finances. And the best way to initiative that process is to start shopping around. Take a close look at your mortgage, the rate and the product: is it what you want? Start with your own lender: can they give you a better rate?

Do they have a product that suits you more? You may not want to pay for the full service mortgage package when you don’t use the linked credit card or the draw-down. If your current lender isn’t helpful, then ask around. There’s always alternatives, even right under your nose.

For instance, industry credit unions or building societies or non-bank lenders, just like Yellow Brick Road.

Also use sites like Cannex or InfoChoice, but whatever you do, get yourself active and informed. This is especially the case for business owners who usually have their overdrafts and business loans linked to their mortgages.

Now is the time to fine-tune these arrangements – talk to a professional, like a Yellow Brick Road Wealth Manager if you don’t understand everything.

Just remember: the Reserve Bank meets again on November 3, Melbourne Cup day.

You have four weeks to prepare, and to ensure that your only gamble is on the horses.

 

Mark Bouris is the Executive Chairman of Yellow Brick Road. Email Mark on mark.neos@ybr.com.au with any queries you may have or check www.ybr.com.au for your nearest branch