RBA holds in May 2024, what this means for your home loan

RBA Governor Michele Bullock

Today, the Reserve Bank of Australia (RBA) announced it will hold the cash rate in May 2024 at 4.35%. 

This is now the fifth consecutive Monetary Policy Decision without change, meeting expert predictions

The RBA says inflation is declining slower than it expected, leading to economic uncertainty. 

"The economic outlook remains uncertain and recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth."

For the average borrower, not much is likely to change in the short term. 

Once the RBA is satisfied that inflation is squarely within its target band of 2 to 3%, that’s when they might start cutting the cash rate

Economists at the Big Four banks predict the first cash rate cut to happen in November 2024 after CommBank and Westpac revised their previous September forecast. 

However, a cash rate cut might not mean immediate savings for home loan borrowers, according to Mozo finance expert, Peter Marshall. 

“When the RBA makes a rate cut call, then the banks will consider what they're going to do,” he said. 

“If they decide that they're going to pass on some or all of that rate cut, it is usually announced that it will happen in a few weeks’ time.

“So you're already looking at four or five weeks after the RBA announcement before the rate cut gets implemented.” 

Even then, he says, it could take your bank an additional four weeks or so to adjust your rate and repayments, extending the timeline to a couple of months. 

Compare and refinance your home loan instead of waiting for rate cuts

While the average owner-occupier, variable home loan rate in Mozo’s database (currently 6.80% p.a. ) dropped 3 basis points since 1 April 2024, the average monthly repayment is still quite high, at $4,164. 

The differences between the average variable rate in May 2022 and May 2024, compared to the cash rate at both those times. Details about how much monthly and yearly repayments have increased since.

It might be time to compare home loans if you’re paying an above-average interest rate. 

As at 3 May 2024, there were 194 owner-occupier, variable rate home loans in the Mozo database with an interest rate lower than 6.80% p.a.

G&C Mutual Bank’s Essential Worker Home Loan even has an interest rate a whole percent lower than the average variable rate, at 5.80% p.a. (5.83% p.a. comparison rate*). 

IMB Bank, at 6.14% p.a. (6.17% p.a. comparison rate*), also revised its cashback offer on the Budget Home Loan, offering up to $4,000 cashback when you refinance your home loan (T&Cs apply). 

The Unloan Variable, at 5.99% p.a. (5.90% p.a. comparison rate*), is another option for those intrigued by the idea of a recurring annual discount on their interest rate. 

But these are just a few of the home loans we track that beat the average interest rate – there are about 191 more in our database! 

While that seems like a lot to comb through, you can start your search for a better rate by checking out the best home loans in 2024, or having a browse through the featured products below. 

Home loan comparisons on Mozo - last updated 16 June 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Basic Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% 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.

    Compare
    Details
  • Variable Home Loan 90

    Principal and Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.04% p.a. variable
    6.06% p.a.

    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.

    Compare
    Details
  • The Better Home Loan Special Offer

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.14% p.a.

    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.

    Compare
    Details
  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    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^

    Compare
    Details

* 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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