Will your home loan cost you less next year? Picture: Thinkstock. Source: Supplied

According to a survey by finder.com.au nine experts are now forecasting a possible cash rate drop next year — just last week six of them had thought otherwise.

That could be good news for homeowners with a variable interest rate.

Finder.com.au money expert Michelle Hutchison said a 25 basis points drop in interest rates would see homeowners save about $50 a week on a $300,000 loan.

Finder.com.au money expert Michelle Hutchison says economic experts have changed their minds about whether interest rates will drop or not. Source: Supplied

Ms Hutchison said as recently as last week the majority of economic experts thought interest rates would not drop in the New Year.

But she said a series of reports about the Australian economy, had seen many of them backflip on their initial forecasts.

She said the Australian dollar was low, there were predictions unemployment may rise and there was a lack of non-mining spending and the GDP below trend.

Ms Hutchison said a drop in interest rates could add more fuel to the property market and lead to more competition and higher bids at auction as buyers felt they could borrow more.

“I guess if the cash rate does fall it will boost to consumer confidence for those with a home loan and those looking to get into the property market,’’ she said.

Competition for properties may become stronger as buyers feel they can spend more. Source: Supplied

“It will become more affordable, I guess that is the main thing.’’

Ms Hutchison warned though that while there were predictions now for a rate drop, it would eventually start rising again and homeowners needed to make sure they could afford additional repayments.

“It is at unsustainably low levels, it is likely to start rising back up towards a more historically normal level of 4 per cent or 5 per cent and that is going to cost an extra $400 or so to an average $300,000 mortgage.’’