The rate that stops the nation: Cash rate remains at 2.50%

By Georgia Kriz · · 2 min read
Fact Checked

At its monthly meeting today, the board of the Reserve Bank of Australia decided to leave the official cash rate on hold at 2.50%.

In a statement, Governor Glenn Stevens said "there has been an improvement in indicators of household and business sentiment recently, but it is still too soon to judge how persistent this will be."

What exactly does that mean, Mr Stevens?

Unlike the punters at Flemington, the board of the Reserve Bank didn’t want to take a gamble on the recovering Australian economy. Thanks to the flow on effects from the earlier rate cuts in August and May, the economy is starting to show healthy signs of growth. Plus, the Big Banks are reporting improved consumer and business confidence - particularly in the housing market.

Nevertheless, Stevens’ has hinted that the Reserve Bank is open to rate movements in the not-too-distant future with pundits predicting a new round of rate changes early next year - stay tuned folks!

What’s news for borrowers?

Borrowers betting on a rate cut need not be disappointed by today’s RBA decision. Rates continue to be at record lows but if you are thinking of fixing your home loan, now would be a good time to lock in rates as we saw 10 banks move their fixed rates up in October by over 20 basis points. Longer term fixed rates are moving the quickest and there is still time to lock in some good 1 & 2 year fixed options.

  • Greater Building Society: 4.29% p.a. (5.32% p.a. comparison rate)
  • iMortgage: 4.67% p.a. (4.81% p.a. comparison rate)
  • Illawarra Home Loans: 4.71% p.a. (5.14% p.a. comparison rate)

If you’re after a top notch variable home loan, check out the Mozo exclusive rate offer of 4.65% p.a. (4.68% comparison rate) with leading home loan lender Firstmac. Click here to find out more about this red hot home loan deal.

And for savers?

Savers wishing to cash in their Melbourne Cup winnings can find great rates for their stash by looking around. Here are our top picks:

  • UBank USaver with Ultra: 4.67% special rate
  • ING Direct Savings Account Maximiser: 4.51% promo rate
  • Citibank Online Saver: 4.40% promo rate

Read last month's Reserve Bank interest rates update.

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Last updated 10 January 2026 Important disclosures and comparison rate warning*
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Loan purpose
Buying or Refinancing
  • Promoted

    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.10 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • The first home loan with an automatic loyalty discount (conditions apply)
    • No application or banking fees
    • Built by CommBank

  • Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.10 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • The first home loan with an automatic loyalty discount (conditions apply)
    • No application or banking fees
    • Built by CommBank

  • Budget Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    • Cashback
    Interest rate
    5.29 % p.a.
    Variable
    Comparison rate
    5.32 % p.a.
    Initial monthly repayment
    $2,773
    Go to site
    • Get up to $4,000 cashback (T&Cs apply)
    • Split loan available

  • Fixed Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    • Redraw available
    • Cashback
    Interest rate
    5.29 % p.a.
    Fixed 2 years
    Comparison rate
    5.52 % p.a.
    Initial monthly repayment
    $2,773
    Go to site
    • Get up to $4,000 cashback (T&Cs apply)
    • Up to 12 months repayments in advance without penalties
    • Split loan available
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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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