Mozo Live: RBA cash rate decision this week, federal election called for May

One of Australia’s financial journalism legends, Noel Whittaker says that instead of trading "scary numbers", political parties would do far better to focus on a problem that’s hurting first-home buyers right now - mortgage insurance (LMI).

"It’s compulsory if you’ve got less than a 20% deposit. Fair enough. But the real sting? It’s non-transferable," said Whittaker in his most recent newsletter.

"If you’ve paid it once and want to refinance – even with the same property and the same loan amount – you have to pay it again. And it’s not pocket change: that second hit could easily top $20,000.

"Time and time again we’re told to shop around for a better rate. But for borrowers with smaller deposits, the cost of jumping ship to a new lender is a concrete wall. You’re locked in, even if a cheaper deal is waiting next door."

Whittaker argues that there’s a simple fix - laws to make lenders mortgage insurance portable. 

"That alone would make first-home ownership more affordable, more flexible, and more competitive – without touching super or the pension system."

The government's Moneysmart site says LMI can increase the cost of switching and outweigh the savings you'll get from a lower interest rate.

Moneysmart advises that if you decide to switch home loans, ask for a refund of some of the LMI from your current loan.

Refinancing includes research beyond LMI of course. Get a better picture of what's on offer at our Refinance Home Loans hub.

That’s all for our interest rate and banking coverage today – join us tomorrow as we follow the Reserve Bank’s April cash rate decision and more.

While economic uncertainty can rise from economic shifts, such as a move toward more tariffs, the impact on Australia's housing market isn’t entirely clear, according to Domain.

There are many factors at play, in fact, including the possible further lowering of interest rates if the Reserve Bank sees a need to stimulate property market activity; the continual growth of the population which puts pressure on housing demand; and, greater interest from investors given the stability of property compared to other investments.

All of these things can serve to increase housing market and home loan activity. 

However, we should keep in mind that there have long been hurdles to keeping a lid on property prices - for example supply chain disruptions and material tariffs have driven a 43% surge in construction costs since 2020, as per Domain’s latest report.

This potentially limits housing supply and drives prices higher, which can make the market more challenging for homebuyers. If prices rise too much, the RBA might hold off on or deliver fewer interest rate cuts, keeping borrowing costs higher than they would be otherwise and slowing housing demand, Domain says. 

On the other hand, it’s also worth noting that tariffs can also slow down the global economy, which might actually offset any imported inflationary pressures. 

Domain argues that tariffs might therefore help lower inflation in Australia if more countries start selling their products and services here to bypass them, helping to drive prices down. That could lead to lower home loan borrowing costs, Domain says.

"Overall, the housing market is caught between competing forces, and whether uncertainty ends up being a drag or a boost depends on how these dynamics play out. To date, the impact of uncertainty on the housing market has been relatively small," as per Domain's report.

It’s surely an interesting time for home buying and home loans. Stay on top of things right here at Mozo, where our experts hand-pick some of the best home loans in our database for you to compare.

With the federal election approaching on May 3, 2025, the cost of living has emerged as a pivotal issue. The Australian Competition and Consumer Commission (ACCC) has proposed a set of reforms aimed at enhancing competition within the supermarket sector to benefit both consumers and suppliers. Key recommendations include:​

• Clearer pricing practices: Implementing transparent pricing strategies to help consumers make informed choices.​
• Increased supplier transparency: Ensuring fairer bargaining conditions by promoting openness between supermarkets and their suppliers.​
• Planning and zoning law reforms: Adjusting regulations to encourage greater competition and market entry.​

These recommendations stem from findings that Australia's supermarket landscape, dominated by major players like Coles and Woolworths, isn't delivering optimal outcomes for consumers and suppliers due to limited competition.

In response to the ACCC's findings, Prime Minister Anthony Albanese has pledged to outlaw supermarket price gouging if re-elected, aiming to enhance price transparency and protect consumers from unfair pricing practices. 

Opposition leader Peter Dutton criticised Labor's approach, advocating for more robust measures, such as introducing divestiture laws to dismantle supermarket monopolies and foster genuine competition.

You can read the list of all 20 recommendations made by the ACCC.

Good morning and welcome to Mozo's live coverage of everything interest rates! Stay tuned as we dive into this week’s news.

Australia’s prime minister Anthony Albanese announced on Friday that the federal election will take place on Saturday 3 May 2025. A five-week campaign is now underway to decide the next government.

The nation’s two major political parties will need to outline what they plan to do about the ongoing cost-of-living and housing crisis, as well as plans for Australia’s energy mix, immigration and healthcare issues, plus their ability to deal with President Trump and withstand a potential trade war between world superpowers – the United States and China.

However, before Aussies choose which political party will lead our nation for the next three years, borrowers and potential homebuyers will be keen to see what the Reserve Bank of Australia (RBA) does with the cash rate this week. The next decision takes place today and tomorrow.

In February, the RBA announced its first rate reduction in four years, trimming the cash rate by 25 basis points to 4.10%. This provided mortgage holders with some much-needed relief and breathing room. 

While a few constructive data releases in the lead up to this decision have ignited some fresh monetary policy debates, consensus among analysts seems to be that it's unlikely we’ll see back-to-back rate cuts.

The Australian Securities Exchange’s (ASX) RBA Rate Indicator currently has market expectations of an interest rate reduction at tomorrow's meeting pegged at just 8%. Additionally, analysts at all of the Big Four banks predict that Australia’s central bank will hold rates in April.

For further information and updates on tomorrow’s rates call and the upcoming federal election, stay tuned to Mozo’s latest live blog. See our RBA rate tracker page for the latest interest rate movements.