RBA to reduce mortgage interest rates for first time in 18 years

The RBA is set to reduce the cost of a mortgage by up to 0.25 per cent for the first time since 1998, a move expected to ease a housing market that is already in crisis.

The change comes at a time when mortgage interest is the highest in the world.

It comes amid a global glut of money that has fueled soaring prices and fuelled a surge in the number of foreclosures.

It comes amid growing signs of a slowing global economy and a tightening mortgage market, fuelled by a surge of foreclosed homes in recent months.

The RBA on Friday cut its forecast for consumer spending, saying consumer spending rose at its slowest pace since mid-2010.

The economy is expected to expand by 0.4 per cent this year and 0.8 per cent next year.

The RBS forecast is for a contraction of 0.1 per cent.

The central bank has cut interest rates twice this year.

It will cut rates by 0 to 0