Home loan interest rates hike faster than savings account rates

Piggy bank on divided background: home loan vs. savings rates.

Banks may have some favouritism regarding which interest rates they hike, according to the latest analysis from Mozo.

Between July and November 2023, the Reserve Bank of Australia lifted interest rates by 0.25%. However, in the Mozo database, the average interest rates for home loans and savings accounts grew by vastly different amounts.

Home loan interest rates for owner-occupiers and investors rose by nearly 0.50% regardless of repayment type (P&I or IO). This could be the culmination of both the June and November rate hikes flowing through to customers.

However, introductory rates for savings account holders only rose by 0.22% – under half the rate of home loan growth. Ongoing savings rates just lifted 0.15%. 

Why hasn’t my savings interest rate gone up?

Every time the RBA raises the cash rate, it’s supposed to tighten the economy by making spending on assets, like home loans, more expensive, while deposits become more attractive. But if this is the logic, why is there a gap between how much savings accounts and mortgage rates have increased?

The reality is that banks and lending institutions have no obligation to pass along any rate hikes. The cash rate affects their operating costs, so banks usually raise profitable interest rates – like mortgage rates – to help cover their losses. Lifting deposit rates is a way of retaining customers.

However, if your home loan interest rate has lifted a lot, but your savings accounts aren’t improving, it may be time to search for a better option. This is especially true if your savings aren’t in an offset account – a type of savings account that saves interest on your home loan. 

A quick look into Mozo’s database reveals the best mortgage rates are under 6%, and the best savings rates are over 5%. Finding a good place to park your money can make all the difference in a time of high living costs

Compare high-interest savings accounts in the table below.

Compare high interest savings accounts - last updated 25 February 2024

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

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    Details
  • Mozo Expert Choice Badge
    High Interest Savings Account

    5.75% p.a. (for $0 to $250,001)

    4.40% p.a.(for $0 to $250,001)

    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.

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    Details
  • High Interest Save Account

    5.10% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    Deposit at least $200 to either Spend or Save account from an external source each month.

    No monthly fees on any of your save accounts. Split your money with up to 10 Save accounts. Set savings targets and track the progress of all your Save accounts. Deposits guaranteed up to $250K per customer.

    Compare
    Details
  • Mozo Expert Choice Badge
    Savings Account

    5.50% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first four months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.

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  • Hero Saver

    4.60% p.a. (for $0 to $250,001)

    1.00% p.a.(for $0 to $5,000,001)

    Yes up to $250,000

    Minimum deposit of $200 and no withdrawals in the month.

    Earn a generous variable rate on balances up to $250,001 each month you deposit at least $200 (excluding interest) on or before the last business day each month and make no withdrawals during the month. $0 account maintenance fees. Create a goal, set up regular deposits and track your progress on the Bankwest app.

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^See information about the Mozo Experts Choice Savings Account Awards

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