Will the RBA hike the cash rate in April 2023? CBA, ANZ, NAB, and Westpac home loan predictions
It’s been nearly one year since the Reserve Bank of Australia began raising the cash rate to curb inflation, taking us from 0.10% in May 2022 to 3.60% in March 2023. Many economists agree we’re approaching the end of this tightening cycle, as the economy has shown signs of contraction. But has the RBA gone far enough in its crusade to slow the economy?
Let’s unpack the predictions for the 4 April RBA meeting and consider where home loan interest rates will land.
Could the April RBA decision be the last rate hike? Why economists are split
At the moment, the Australian economy teeters at a tipping point. Consumer confidence is down and property prices appear to have bottomed out amidst abysmal sale stock. Retail trade has shown modest growth, largely trending flat throughout the summer, though it’s still too high to halt runaway inflation, which clocked in at 6.9% over the year to February 2023.
While this is markedly down from the 8.4% and 7.6% reported in the year to December and January, respectively, it’s still stubbornly above the 2% - 3% RBA target.
“There are indications coming through that say the Reserve Bank needs to go a little bit further, but then there are other indicators that say that it shouldn't go any further,” explains Mozo banking expert, Peter Marshall.
“So it’s really hard to make a call on which way the RBA will choose to play it. People are already feeling the cost of living pressures acutely. But at the same time, inflation hasn’t come down far enough. Spending hasn't really slowed as much as the Reserve Bank would like. And then there are lots of things going on in the banking system internationally that suggest that perhaps now is not a great time to increase interest rates, so could definitely go either way.”
Last month, both the US and UK reserve banks lifted their own official interest rates by 0.25%, despite both economies experiencing signs of contraction. As guardian of Australia’s monetary policy, the RBA would have good reason to want to move 0.25% in April as well to remain competitive with some of our biggest trading partners.
However, with growing calls for respite at home, the RBA may keep its eyes on our own island for now. When announcing the March decision, RBA governor Philip Lowe softened his language about the path of future rate hikes, indicating that the board will heavily watch economic indicators as they chart a course forward.
“The Reserve in Australia may decide that it can wait a month before raising rates, just to take a little breather,” says Marshall.
“It would be good, I think, if they did take a break, but that doesn’t mean there are no more rate rises at all.”
So the RBA may have another 0.25% cash rate movement in store. The question remains: will we see it in April, or later down the track?
How high will rates go? Westpac, CBA, NAB, and ANZ rate predictions for April 2023
At the time of writing, the Big Four banks are split down the middle as to whether we’ll get a 0.25% bump to the cash rate in April. Everything is less of a certainty and more of a coin flip.
Westpac argues the RBA will pause in April before moving again for the last time in May, bringing the final cash rate to 3.85% for the cycle, before the RBA makes 1.50% worth of cuts throughout 2024 - 2025.
Similarly, CBA believes there's a 55% change the RBA will pause in April before potentially moving in May if there's an economic case for it until any rate cuts in 2024. The big bank concedes there's a 45% of a 0.25% hike in April.
ANZ and NAB foresee two more movements over the next three months, bringing the final cash rate to a staggering 4.10% in June. Both predictions involve a steady hand either in April or May.
Cash rate peak predictions from the big banks (30 March 2023)
April 2023 | May 2023 | June 2023 | |
CBA | Nil | 3.85% p.a. OR Nil | - |
Westpac | Nil | 3.85% p.a. | - |
NAB | 3.85% p.a. OR Nil | 3.85% p.a. OR Nil | 4.10% p.a. |
ANZ | 3.85% p.a. OR Nil | 3.85% p.a. OR Nil | 4.10% p.a. |
Out of all the Big Four banks, only Commonwealth Bank and NAB have consistently made the right call over the last six months – others have usually skewed too hawkish in their estimates. But as the predictions narrow and the cycle ends, it may be too close to call.
Loan details
Repayment change if rates go up
What does a cash rate pause mean? Preparing for the future home loan market
After scrambling to raise rates for so long, the idea of the ship holding steady seems almost alien. So what would a constant cash rate mean for the rest of 2023?
“A steady cash rate gives people a bit more confidence to plan their futures: to buy houses, borrow money, spend money, all the stuff that says the economy is alive,” says Mozo expert Peter Marshall.
Most urgently, however, Marshall warns that the moment rates hold or even drop, the property market could explode again. This would mean a sharp rise in prices, strong competition at auctions, and for sale signs that disappear within days.
“The number of houses for sale right now is incredibly low,” explains Marshall. “It has been since the start of this year. I’ve seen plenty of evidence that people are willing to pay silly money just to get the deal done and have a house.”
“So I think as soon as people get the confidence that the RBA is done or pretty much done with increasing rates, it’s all going to take off again and will go like a rocket.”
As such, now may be the perfect time to move on a property if you can. So run your finances through the first home buyer checklist, do an insurance inspection, and get your ducks in a row. 2023 may be the most interesting year for property yet.
Compare home loans below. For award-winning picks from 2023, check out our best home loans hub.
Home loan comparisons on Mozo
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Fixed Home Loan
- Owner Occupier
- Principal and Interest
- Interest rate
-
5.84
%
p.a.
Fixed 1 years
- Comparison rate
-
5.93
%
p.a.
- Initial monthly repayment
-
$2,852
Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.
- Interest rate
-
5.54
%
p.a.
Fixed 2 years
- Comparison rate
-
5.93
%
p.a.
- Upfront fees
-
$495
- Ongoing fees
-
$0.00
- Discharge fee
-
$325.00
- Extra repayments
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- Redraw facility
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yes - free
- Offset account
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yes- optional with $10/month
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $3,000,000
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- Fixed
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- Owner Occupier
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Read our Mozo Review to learn more about this NRMA Insurance Fixed Home Loan
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Unloan Variable
- Owner Occupier
- LVR <80%
- Interest rate
-
5.99
%
p.a.
Variable
- Comparison rate
-
5.90
%
p.a.
- Initial monthly repayment
-
$2,995
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.
- Interest rate
-
5.99
%
p.a.
Variable
- Comparison rate
-
5.90
%
p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge fee
-
$0.00
- Extra repayments
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yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 80.00%
- Minimum borrowing amount
- $10,000
- Maximum borrowing amount
- $10,000,000
- Type of mortgage
- Variable
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- Owner Occupier
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Read our Mozo Review to learn more about this Unloan Unloan Variable
Go to site
-
Fixed Home Loan
- Owner Occupier
- Principal and Interest
- Interest rate
-
5.84
%
p.a.
Fixed 1 years
- Comparison rate
-
5.93
%
p.a.
- Initial monthly repayment
-
$2,852
Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.
- Interest rate
-
5.54
%
p.a.
Fixed 2 years
- Comparison rate
-
5.93
%
p.a.
- Upfront fees
-
$495
- Ongoing fees
-
$0.00
- Discharge fee
-
$325.00
- Extra repayments
-
- Redraw facility
-
yes - free
- Offset account
-
yes- optional with $10/month
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $3,000,000
- Type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- -
- Special offers
- -
Read our Mozo Review to learn more about this NRMA Insurance Fixed Home Loan
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2-Year Discounted - Simple Home Loan Variable
- Owner-Occupied
- Principal and Interest
- LVR<60%
- Interest rate
-
5.54
%
p.a.
Variable for 24 months and then 5.99% p.a.
- Comparison rate
-
5.90
%
p.a.
- Initial monthly repayment
-
$2,988
Enjoy a low variable rate with no application, ongoing or monthly fees to pay. Access your money via internet banking at any time with free redraws. Make additional repayments at any time. Available for owner occupied, investment and interest only repayments.
- Interest rate
-
5.54
%
p.a.
Variable for 24 months and then 5.99% p.a.
- Comparison rate
-
5.90
%
p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge fee
-
$175.00
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 60.00%
- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
- $2,000,000
- Type of mortgage
- Variable
- Repayment types
- Principal & Interest
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- Owner Occupier
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- Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about this First Option Bank 2-Year Discounted - Simple Home Loan Variable
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Variable Home Loan
- Owner Occupier
- Principal and Interest
- Interest rate
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5.98
%
p.a.
Variable
- Comparison rate
-
6.02
%
p.a.
- Initial monthly repayment
-
$2,991
Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.
- Interest rate
-
5.98
%
p.a.
Variable
- Comparison rate
-
6.02
%
p.a.
- Upfront fees
-
$495
- Ongoing fees
-
$0.00
- Discharge fee
-
$325.00
- Extra repayments
-
- Redraw facility
-
yes - free
- Offset account
-
yes- optional with $10/month
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $3,000,000
- Type of mortgage
- Variable
- Repayment types
- Principal & Interest
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- Owner Occupier
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- -
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Read our Mozo Review to learn more about this NRMA Insurance Variable Home Loan
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Unloan Variable
- Owner Occupier
- LVR <80%
- Interest rate
-
5.99
%
p.a.
Variable
- Comparison rate
-
5.90
%
p.a.
- Initial monthly repayment
-
$2,995
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.
- Interest rate
-
5.99
%
p.a.
Variable
- Comparison rate
-
5.90
%
p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge fee
-
$0.00
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 80.00%
- Minimum borrowing amount
- $10,000
- Maximum borrowing amount
- $10,000,000
- Type of mortgage
- Variable
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- Principal & Interest
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- Owner Occupier
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Simple Home Loan Variable
- Owner-Occupied
- Principal and Interest
- LVR<60%
- Interest rate
-
5.99
%
p.a.
Variable
- Comparison rate
-
5.99
%
p.a.
- Initial monthly repayment
-
$2,995
Enjoy a low variable rate with no application, ongoing or monthly fees to pay. Access your money via internet banking at any time with free redraws. Make additional repayments at any time. Available for owner occupied, investment and interest only repayments.
- Interest rate
-
5.99
%
p.a.
Variable
- Comparison rate
-
5.99
%
p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge fee
-
$175.00
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 60.00%
- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
- $3,500,000
- Type of mortgage
- Variable
- Repayment types
- Principal & Interest
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- Owner Occupier
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- -
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Fixed Rate
- Owner Occupier
- Principal & Interest
- <80% LVR
- Interest rate
-
5.99
%
p.a.
Fixed 3 years
- Comparison rate
-
6.89
%
p.a.
- Initial monthly repayment
-
$2,995
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.
- Interest rate
-
5.99
%
p.a.
Fixed 3 years
- Comparison rate
-
6.89
%
p.a.
- Upfront fees
-
$160
- Ongoing fees
-
$0.00
- Discharge fee
-
$160.00
- Extra repayments
-
yes - free up to to lesser of 5% of original fixed loan amount, or $5,000 each year
- Redraw facility
-
no
- Offset account
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Optional - $10 per month - 1 year fixed term only
- Maximum loan to value ratio
- 80.00%
- Minimum borrowing amount
- $20,000
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- Type of mortgage
- Fixed
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- Principal & Interest
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- $3,000 cashback for eligible First Home Buyers borrowing $250k+, $2,000 cashback when you refinance loans of $250k+, <80% LVR, settle within 180 days for first home buyers, 120 days for refinances. Excludes refinances from ANZ, ANZ Plus and Suncorp.
Read our Mozo Review to learn more about this ANZ Fixed Rate
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Mortgage Simplifier
- LVR<80%
- Owner Occupier
- Principal & Interest
- Interest rate
-
6.14
%
p.a.
Variable
- Comparison rate
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6.17
%
p.a.
- Initial monthly repayment
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$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.
- Interest rate
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6.14
%
p.a.
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- Comparison rate
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6.17
%
p.a.
- Upfront fees
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$350
- Ongoing fees
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$0.00
- Discharge fee
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$250.00
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 80.00%
- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
- $2,000,000
- Type of mortgage
- Variable
- Repayment types
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- Owner Occupier
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- Fortnightly, Monthly
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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.
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