Experts predict interest rate hold from RBA in May 2024

Key points 

  • Experts think the cash rate will remain at 4.35% after the May RBA meeting
  • Higher-than-expected inflation figures prompt Big Four to change their predictions 
  • Refinancing may be the only way to reduce your mortgage repayments until the RBA cuts interest rates. 
RBA governor Michele Bullock speaks at a media conference

With the Consumer Price Index (CPI) coming in hotter on inflation than economists expected this quarter, doubts about a cash rate cut by year’s end are mounting.

The CPI grew 1% over the March quarter, taking annualised inflation to 3.6% in the 12 months to March 2024, which Mozo finance expert, Peter Marshall, says could mean another rate hold on 7 May 2024. 

However, the Reserve Bank of Australia says it won’t rule out cuts or hikes. RBA governor, Michele Bullock, told the media the Board is “responding to data as the data come out.” 

Despite the unpleasant inflation figures in the quarterly CPI, Mozo finance expert Peter Marshall says the RBA is still likely to hold the cash rate in May 2024. But, he cautions that the CPI will have a lot to do with the Board’s moves in the future.  

“The CPI result was a little higher than had been expected by the RBA and certainly the view of most economists.

“Following that, if [inflation] increases it makes it more likely that the RBA will stick with the cash rate where it is for longer, or possibly even need to implement one or two more rate increases later in the year.

“They won’t want to increase the cash rate unless it's really necessary,” he said. 

Big Four banks update their interest rate cut predictions 

While economists at the Big Four banks tend to agree that the cash rate will remain at 4.35% in May 2024 we’ve already seen interest rate predictions from some of the Big Four move from a September cut to a November cut. 

How to lower your home loan repayments 

Borrowers desperate for rate relief, who are watching the expert predictions get further and further away, still have a couple of options to lower their home loan repayments, says Marshall. 

“The best thing for everyone to do is to see what rate you're on now, see what rate you could be on by having a look at what other lenders are offering, and then thinking about whether that sort of reduction in interest is worth you putting a bit of time into refinancing your loan.

“And if you don't want to do that, at least have a chat with your current lender and say, ‘Hey, I've seen a loan that's a bit lower than what you're offering. And I'm thinking about going to that lender.’ See if you can leverage a rate cut out of your existing lender that way.” 

When you compare home loans, keep an eye out for features like offset accounts and redraw facilities, which can help to reduce the amount of interest you pay. Some lenders offer them free of charge, while others have a small fee. 

But Marshall also says those who have paid off a fair chunk of their home loan could benefit from taking a look at their loan-to-value ratio (LVR), as a means of reducing their interest rate.

“The other possibility for some people might be, if you've had your loan for a while and you've decreased your loan-to-value ratio, you may be able to get a better deal from a different lender by going through that refinancing process.

“If you start off paying interest rates at 80% LVR or above, and if you're down to 60% now, a lender might find you a less risky borrower and be happy to give you a better rate.

“So there are a couple of lenders that will do that automatically for you during the life of your loan, but most lenders don't.” 

Start off by checking out the latest refinance home loan rates, or browsing through the featured home loans below to see what’s on offer.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 473 home loans.
Last updated 20 June 2024 Important disclosures and comparison rate warning*
  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Discount Variable Home Loan

    • Owner Occupier
    • LVR<70%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.01 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Fixed Rate Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Fixed 3 years
    Comparison rate
    6.15 % p.a.
    Initial monthly repayment
    $3,027

    Additional repayments of up to $10K per fixed year. Interest rate discounts available. Waiver of $499 application fee when combined with an Orange Advantage Home Loan.

  • The Better Home Loan Special Offer

    • Owner Occupier
    • Principal & Interest
    • LVR<80%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a variable rate home loan with a bunch of features from Police Credit Union. Make extra repayments at any time without penalty. No monthly, annual or upfront fees. Free online redraw. Minimum 20% deposit. Qualifying criteria applies. Minimum loan amount is 200K. For new customers only. Mozo Experts Choice Home Lender Credit Union of the Year 2023.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.59 % p.a.
    Fixed 3 years
    Comparison rate
    7.06 % p.a.
    Initial monthly repayment
    $3,190

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

image of houses

Need help with refinancing?

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

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