What does the RBA have in store for February - and the rest of 2018?

Kelly Emmerton

30 Jan 2018

Rba interest rates february 2018 content

The Reserve Bank board is set to have its first meeting of 2018 next week and although there have been predictions of a rate rise this year, Mozo’s Peter Marshall has said a change in February is unlikely.

The RBA has been sitting on its hands for a while now, with no changes to the official cash rate since August 2016.

Official rate rises have been even rarer in Australia - in fact, the last one was seven years ago, in November 2010. But according to Marshall, the low rate environment can’t last forever, and 2018 might just be the year that breaks the downward trend of Australia’s official cash rate.

“The RBA have already said they consider the ‘new normal’ cash rate to be 3.50%, which is quite a bit higher than the 1.50% we’re sitting on now. So they’ve already signalled a desire to start pushing the cash rate higher in the future,” said Marshall.

RELATED: Best home loans for January 2018: Mozo Editor’s picks

Despite that, conditions will have to be right before the Reserve Bank makes a move. Key economic indicators such as wages, employment numbers, inflation and consumer confidence levels need to start moving in the right direction to make a rate rise possible in 2018.

All this takes time, which means a February rate change is more or less off the table this year.

“I’d say there’s a growing argument for a Reserve Bank rate rise later in 2018, or maybe even two, but for February, it would be a surprise to see a change. The RBA are likely to stick to their policy of cautious slow movement this year, which means it’s too early for them to make any move at this stage of the game,” said Marshall.

One factor that might still temper the RBA’s desire to start nudging rates up is the high level of household debt Aussies are facing. With close to 30% or more than 921,000 Aussies households under mortgage stress, according to a recent report from Digital Finance Analytics, pushing interest rates higher still is not a move the Reserve Bank will make lightly.

“The banks don’t have to raise home loan rates when the RBA raises the cash rate, but there’s every chance they will. The RBA are aware of this, and will be very careful about adding any more pressure to already struggling households,” Marshall explained.

If your home loan repayments are stretching the family budget thin, you might want to consider refinancing your home loan to find a better deal. To get you started, check out some refinancing loans in the table below.

Competitive loans to refinance your mortgage

Rates updated daily. Advertiser disclosure.

  • UBank
    Mozo Expert Choice Badge" style="width:60px;">

    2.19% p.a.

    2.19% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    Owner Occupier, Principal & Interest

    2.19% p.a.

    2.19% p.a.

    Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.

    UHomeLoan - Discount Offer

    Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 2.19% p.a.

    • 2.19% p.a.

    • $0

    • 80.00%

    • $100,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

    Details Close

  • Athena
    Mozo Expert Choice Badge" style="width:60px;">

    1.99% p.a.

    1.99% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    1.99% p.a.

    1.99% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Celebrate Variable Home Loan

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 1.99% p.a.

    • 1.99% p.a.

    • $0

    • 60.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

    Details Close

  • Macquarie

    p.a.

    2.19% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    p.a.

    2.19% p.a.

    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.

    Basic Home Loan

    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.

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • $0

    • p.a.

    • 2.19% p.a.

    • $0

    • 70.00%

    • $150,000

    • $750,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Basic Home Loan

    Details Close

  • HSBC

    p.a.

    2.87% p.a.

    $1234

    Product details Close details
    Fixed Rate Home Loan Home Loan Package

    Owner Occupier, Principal & Interest, LVR <80%

    p.a.

    2.87% p.a.

    Ability to split your home loan between Fixed and Variable. Dedicated Relationship Manager. Min 20% deposit. Refinancers borrowing $250,000 or more could receive $3,288 cashback (T&Cs, eligibility and lending criteria apply).

    Fixed Rate Home Loan Home Loan Package

    Ability to split your home loan between Fixed and Variable. Dedicated Relationship Manager. Min 20% deposit. Refinancers borrowing $250,000 or more could receive $3,288 cashback (T&Cs, eligibility and lending criteria apply).

    • $390.00 yearly

    • $300.00

    • yes - free up to $10,000 p.a.

    • no

    • no

    • $270

    • p.a.

    • 2.87% p.a.

    • $270

    • 80.00%

    • $500,000

    • $7,500,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Receive $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 31 December 2021 and settle by 28 February 2022.

    Read our Mozo Review to learn more about the Fixed Rate Home Loan

    Details Close

  • IMB Bank

    p.a.

    2.86% p.a.

    $1234

    Product details Close details
    Fixed Home Loan

    Owner Occupier, Principal & Interest

    p.a.

    2.86% p.a.

    The IMB Fixed Rate Home Loan gives you peace of mind with the security of fixed loan repayments. You can also pay up to 12 months repayments in advance without penalty.

    Fixed Home Loan

    The IMB Fixed Rate Home Loan gives you peace of mind with the security of fixed loan repayments. You can also pay up to 12 months repayments in advance without penalty.

    • $6.00 monthly

    • $350.00

    • yes - free up to 1 year in advance

    • yes - free

    • no

    • $799

    • p.a.

    • 2.86% p.a.

    • $799

    • 95.00%

    • $10,000

    • $5,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Home Loan

    Details Close

^See information about the Mozo Experts Choice Home loans Awards