Relief at last! RBA holds steady for April with no cash rate hike
In an announcement made to the cheers of mortgage-stressed homeowners, the Reserve Bank of Australia has, at last, paused its crusade against inflation, leaving the cash rate at 3.60%.
This marks the first time the RBA hasn’t lifted official interest rates in nearly a year. While inflation remains well over its target band of 2% - 3%, the central bank saw enough signs of contraction in the economy to use a steady hand instead of the monetary hammer – at least for now.
In a statement to the press, RBA governor Philip Lowe reiterated that slowing down inflation remains the top priority, but gentled his language around how hard and high rates will go.
"A range of information, including the monthly CPI indicator, suggests that inflation has peaked in Australia," explained Lowe.
"Growth in the Australian economy has slowed, with growth over the next couple of years expected to be below trend. There is further evidence that the combination of higher interest rates, cost-of-living pressures and a decline in housing prices is leading to a substantial slowing in household spending. While some households have substantial savings buffers, others are experiencing a painful squeeze on their finances."
The question remains whether today’s decision will be the last for the tightening cycle, or if there is still further to go.
Are rate hikes done for the year? Don’t celebrate just yet
Today’s decision will likely relieve borrowers, whose mortgages have been hammered by a steady beat of interest rises. However, with inflation still much too high, we shouldn’t celebrate too soon.
Indeed, Mozo banking expert Peter Marshall warns that a break doesn’t mean ‘no more rate rises’ for the year.
“I think we’re either at – or very close to – the peak of the cash rate,” Marshall explains. “There might be one increase left. I can’t see them being long.”
Instead, it’s more likely the RBA will wait to see how effective the current course has been. If the economy continues to cool down, the central bank may leave things as they are. If not, the RBA may give the cash rate one more nudge.
"The Board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target," said RBA governor Philip Lowe.
"The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty.
"In assessing when and how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market."
Latest estimates from the Big Four Banks – CBA, Westpac, ANZ, and NAB – point toward a final rate hike in May or June, lifting the cash rate peak to 3.85%.
But for now, borrowers struggling with their monthly repayments can sit tight.
Property prices set to boom again?
Evidence mounts that property prices may have reached their nadir. After plummeting -8.4% in the year to January 2023, many analysts suspect first-home buyers have been too leery of steep mortgage rates to buy in, while sellers have avoided hitting the market with properties doomed to make small profits.
However, if the cash rate holds steady for long enough, home-hungry buyers may sense an opportunity and reheat the market.
“There are people desperate to buy houses,” explains Marshall. “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.”
Some lenders have even begun ticking down fixed rates on their home loan offers, which have proved a reliable bellwether for where banks suspect the economy is headed. While one to three-year terms remain lofty, four and five-year terms have seen more meaningful cuts.
Marshall says this indicates lenders expect another six to twelve months of high interest rates – then long-term, things will calm down.
“How banks make money is to beat consumers fixing as an investment,” Marshall surmises. “That’s their whole business.”
So while prices are low, now may be the ideal time to leap on a property if you can.
Will banks change home loan rates after the April RBA decision?
Banks will likely leave home loan offers as is throughout April, as the cash rate hasn’t put any more pressure on their funding costs.
However, we’ll still track which lenders have changed rates as word comes in. To see how your lender compares, visit our home loan comparison page.
Read last month's Reserve Bank interest rates update.
Home loan comparisons on Mozo
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Unloan Variable
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$3,043
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6.09
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6.11
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$3,027
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$250
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6.09
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6.13
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$3,027
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6.09
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6.13
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$595
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$0.00
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$250.00
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yes - free
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yes - fees apply
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no
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Optimum Fixed Rate Home Loan
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5.69
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6.34
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$2,899
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5.69
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6.34
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$0
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$0.00
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yes - free up to $20,000 p.a. during fixed rate term
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yes - free
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no
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- 80.00%
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Unloan Variable
- Owner Occupier
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5.99
%
p.a.
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5.90
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p.a.
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$2,995
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5.99
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5.90
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p.a.
- Upfront fees
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$0
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$0.00
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$0.00
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yes - free
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yes - free
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no
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- 80.00%
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- $10,000
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- $10,000,000
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OMG Home Loan
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5.99
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$2,995
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6.02
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$300
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$0.00
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$395.00
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yes - free
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no
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Flex Home Loan
- Fixed
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- LVR <60%
- Interest rate
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5.99
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p.a.
Fixed 3 years
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6.34
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$2,995
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$250
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$250.00 yearly
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$300.00
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yes - free
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yes - free
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yes
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6.01
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6.14
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$3,001
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6.01
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$134
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$10.00 monthly
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$350.00
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yes - free
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yes - free
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yes
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Neat Home Loan
- Owner Occupier
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6.09
%
p.a.
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- Comparison rate
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6.11
%
p.a.
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$3,027
Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
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6.09
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$250
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$0.00
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$300.00
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yes - free
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yes - free
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no
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- $80,000
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Special Real Deal Home Loan
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6.09
%
p.a.
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6.13
%
p.a.
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$3,027
Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.
- Interest rate
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6.09
%
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6.13
%
p.a.
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$595
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$0.00
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$250.00
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yes - free
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yes - fees apply
- Offset account
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no
- Maximum loan to value ratio
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- $150,000
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Basic Home Loan
- Owner Occupier
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6.14
%
p.a.
Variable
- Comparison rate
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6.16
%
p.a.
- Initial monthly repayment
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$3,043
Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
- Interest rate
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6.14
%
p.a.
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- Comparison rate
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6.16
%
p.a.
- Upfront fees
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$350
- Ongoing fees
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$0.00
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$400.00
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yes - free
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yes - free
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no
- Maximum loan to value ratio
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- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
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Flex Home Loan
- Owner Occupier
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- Interest rate
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6.14
%
p.a.
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- Comparison rate
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6.38
%
p.a.
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$3,043
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
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6.14
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6.38
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$250
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$250.00 yearly
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$300.00
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yes - free
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yes - free
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yes
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Offset Home Loan
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6.14
%
p.a.
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6.39
%
p.a.
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$3,043
Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.
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6.14
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6.39
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$350
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$248.00 yearly
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$400.00
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yes - free
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yes - free
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yes
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- 60.00%
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- $150,000
- Maximum borrowing amount
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Basic Home Loan
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6.25
%
p.a.
Fixed 3 years
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6.20
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p.a.
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$3,079
No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.
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6.25
%
p.a.
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6.20
%
p.a.
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$350
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$0.00
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$400.00
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yes - up to $10,000 p.a.
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yes - free
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no
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Offset Home Loan
- Fixed
- Owner Occupier
- Principal & Interest
- LVR <70%
- Interest rate
-
6.25
%
p.a.
Fixed 3 years
- Comparison rate
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6.42
%
p.a.
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$3,079
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6.25
%
p.a.
Fixed 3 years
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6.42
%
p.a.
- Upfront fees
-
$350
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$248.00 yearly
- Discharge fee
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$400.00
- Extra repayments
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yes - up to $10,000 p.a.
- Redraw facility
-
yes - free
- Offset account
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yes
- Maximum loan to value ratio
- 70.00%
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- $150,000
- Maximum borrowing amount
- $10,000,000
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Fixed Rate
- Owner Occupier
- Principal & Interest
- <80% LVR
- Interest rate
-
6.54
%
p.a.
Fixed 2 years
- Comparison rate
-
7.10
%
p.a.
- Initial monthly repayment
-
$3,174
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
-
6.54
%
p.a.
Fixed 2 years
- Comparison rate
-
7.10
%
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
-
Optional - $10 per month - 1 year fixed term only
- Maximum loan to value ratio
- 80.00%
- Minimum borrowing amount
- $20,000
- Maximum borrowing amount
- -
- Type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
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- Weekly, Fortnightly, Monthly
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- $3,000 cashback for eligible First Home Buyers, $2,000 cashback when you refinance loans of $250k+, apply from 1 Dec 2022, settle within 180 days.
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Your selected reserve bank interest rates
* 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.
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.