SYDNEY, Oct 12 (Reuters) - A measure of consumer sentiment rose...

SYDNEY, Oct 12 (Reuters) - A measure of consumer sentiment rose for a third month in October as Australians became more optimistic about the economy and their own finances for the year ahead, its compilers said on on Wednesday.

The Melbourne Institute and Westpac Bank (WBC) survey of 1,200 people found consumer sentiment rose by 1.1 percent in October, from September when it edged up 0.3 percent.

That left the index up 4.7 percent on October last year at 102.4, with optimists outnumbering pessimists.

"This result extends a remarkable run of stability," said Westpac chief economist Bill Evans.

"Over the last six months the index has held within a relatively tight 4 percent range with five of the six readings hovering just above 100 indicating that optimists have remained slightly in the ascendancy."

Sentiment looked to have been underpinned by rate cuts from the Reserve Bank of Australia (RBA) in August and May which took home loan costs to record lows. The sentiment index for those with a mortgage climbed 2.2 percent in October to be 14.3 percent higher than a year ago.

The impact of falling mortgage rates may have shown in the survey measure of family finances over the next 12 months which rose 0.9 percent in October. Expectations for the economic outlook over the next 12 months also rose, gaining 5.8 percent.

Other components of the index were little changed, with family finances compared to a year ago down 0.4 percent, while economic conditions for the next five years held steady.

The measure of whether this was a good time to buy major household items dipped 0.4 percent, after jumping in September. It was still up 9.2 percent on October last year.