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Looking for the latest home loan interest rates? Compare over a hundred home loans with Mozo.
The Reserve Bank of Australia has surprised everyone by leaving the official cash rate unchanged.
Everyone expected another 0.25% increase. We’ve seen all the indicators suggesting that the economic recovery is continuing to strengthen, including the Westpac-Melbourne Institute Leading Index posting its fastest turnaround since the 1970s, inflation figures being higher than expected and unemployment at an 8 month low. All of that pointed to the RBA continuing to put rates back to where they were before the financial crisis. Last week, a survey of 16 economists by AAP failed to turn up any who would put their money on the RBA holding rates steady. (Don't you wish you'd taken that bet now?)
The only hint was a speech given by RBA deputy governor Ric Battellino in December, where he said that because the banks had been increasing their interest rates faster than the RBA it reduced the need for the RBA to keep raising rates further.
But the big question now is not what the RBA does but what the Big 4 banks do. Hold rates? Sneak in a small increase? Cut rates?
In December, you’ll remember that Westpac went out hard and fast and nearly doubled the RBA increase on its home loan rates. And then they were slammed by everyone from Kevin Rudd down. So it seems very unlikely that any bank will stick its neck out like that again (for a very long time!). So no variable home loan rate increases for the entire month of February, is our call.
On the other hand, Chris Richardson of Access Economics was quoted last week saying that he expected the big banks to pass on less than the RBA increases in the second half of 2010, because of increasing competition and lower funding costs. Might any of them be confident enough to start this process this month? Mozo’s crystal ball says no. The odds of an RBA increase in March have skyrocketed, and so they’ll all hold off until then at least.
Watch out for some more increases to fixed rates, however!
But whatever the banks do, either in response to RBA announcements or at any other time, Mozo has a team on the case, chasing down the rates as they happen.
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All the latest RBA info
Australian treasurer Wayne Swan has warned the country's major banks that they risk alienating their customers if they hike interest rates.
The Reserve Bank of Australia (RBA) surprised many economists earlier this week when it opted not to lower the base rate to four per cent and now there are fears that some of the main lenders will see this as an opportunity to increase their own rates.
Experts have predicted that ANZ, Commonwealth Bank, Westpac and NAB may all make a readjustment before the RBA board members meet again in March.
Mr Swan has urged Aussies not to be bullied by the big four and has insisted that savings can be made by comparing bank accounts and other packages.
"The reforms we've put in place make it easier for families to ditch their bank if it doesn't do the right thing by them," he commented.
Last week, the Australian Associated Press conducted a survey, which found that 13 out of 14 economists believed the RBA would cut interest rates by 0.25 per cent in February.
The Reserve Bank of Australia (RBA) has surprised analysts by maintaining the base rate at 4.25 per cent.
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