December RBA meeting: Interest rates remain at 0.75%

It was the final meeting of 2019 - in fact, the final meeting of the decade - but rather than ending the year with a bang, the RBA made the decision to hold interest rates at 0.75% at its December board meeting in Sydney this afternoon. 

The Reserve Bank has already deployed plenty of fireworks throughout the year with three seperate cuts to the official cash rate in June, July and October, but following worse than anticipated unemployment figures last month, there was a hint of speculation that rates could have been dropped for a fourth time in 2019.

That wasn’t the case though, with Reserve Bank Governor, Philip Lowe, highlighting a 'turning point' in the direction of the Australian economy among other factors behind a decision to leave rates on hold. 

"The easing of monetary policy this year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. The lower cash rate has put downward pressure on the exchange rate, which is supporting activity across a range of industries," he said.

"Given these effects of lower interest rates and the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting while it continues to monitor developments, including in the labour market."

According to Mozo Banking Expert, Peter Marshall, the RBA may have been reluctant to pull the trigger on another rate cut too prematurely, especially with interest rates already hovering so close to zero. 

“The Reserve Bank has limited cuts left. Governor Philip Lowe said as much in a speech last week where he indicated that rates were likely to stay low rather than head into negative territory,” he said. 

“The board would also have been acutely aware of the negative effect their June-July double rate cut had on consumer sentiment. That’s why they would have been hesitant to risk upsetting the apple cart in the run up to Christmas when retailers are desperately wanting Australians to spend rather than save.”

What’s the current state of home loan rates? 

It won’t be a shock to anyone that the three RBA interest rate cuts of 2019 have had a profound impact on driving down home loan interest rates, but now that there’s been some breathing space since the October cut, where are mortgage rates sitting? 

According to the latest figures from the Mozo database, the average variable rate home loan for an owner occupier making principal and interest repayments on a loan of $400,000 (at 80% LVR) is currently 3.72%.

Here are some of the lowest variable rate offers currently in the Mozo database.

LenderHome loanRate
HomestarStar Essentials Home Loan2.74% p.a. (2.77% p.a. comparison rate**)
G&C Mutual BankPremium Home Loan (Package)2.79% p.a. (3.20% p.a. comparison rate**)
AthenaVariable Home Loan2.84% p.a. (2.80% p.a. comparison rate**)
UBankUHomeLoan - Discount Offer2.84% p.a. (2.84% p.a. comparison rate**)

Meanwhile, the average 3 year fixed rate home loan for the same scenario as above is currently 3.23%. 

“There was a reasonable amount of home loan movement in November as lenders continued to pass on cuts following the October RBA announcement, but those moves will have largely come in now,” said Marshall. 

“As you would expect with an historically low cash rate, there is a healthy amount of competition among lenders for both owner occupiers and investors, making this an opportune time for borrowers looking to take out a home loan or refinance their existing offer.”

What’s happening with savings accounts and term deposits? 

Deposit rates have also continued on their downward slide, though figures from the November edition of the Mozo Banking Roundup show a bit of life among term deposits. 

Over the past month term deposit rate cuts have actually slowed, with the Mozo database recording the lowest number of term deposit rate reductions in five months. 

There was even some movement towards the top of the market, as challenger bank Judo Bank lifted a number of its already competitive offers to as high as 2.50% for a five year term.

The overall picture still remains relatively grim for savers looking for a return through a term deposit though. Here are the current averages in the Mozo database for select terms: 

  • 1.50% p.a for a 6 month term (interest paid at maturity)
  • 1.47% p.a for a 1 year term (interest paid annually) 
  • 1.43% p.a for a 5 year term (interest paid annually)

There’s been little solace for Australians with a savings account in the last months either, with the Mozo database recording further falls to rates. 

In fact, the average ongoing savings account rate in the Mozo database has almost halved since June 2019 (just before the first RBA cut of 2019) with the average now sitting at just 0.97%. 

RELATED: Judo Bank bucking the trend with new 2.50% term deposit rate

Ready to check out the latest interest rates on a range of banking products for yourself? 

Compare a range of offers all in the one place using the Mozo home loan, term deposit and savings account comparison tables, or check out some of the hot offers in the table below. 

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 14 December 2024 Important disclosures and comparison rate warning*
What are your home loan needs?

Your loan-to-value ratio (LVR): 50%

Loan amount and LVR will affect interest rates.

  • Promoted

    Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Promoted

    Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    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.

  • Promoted

    Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Promoted

    Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    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.

  • Promoted

    Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.89 % p.a.
    Fixed 1 year
    Comparison rate
    6.30 % p.a.
    Initial monthly repayment
    $2,867
    Go to site

    Lock in a competitive fixed interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan.There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a speedy online application. Get the flexibility of loan split options and redraw facility. No offset account available for fixed rate proportion of loan. Other fees may be applicable. T&Cs apply.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.89 % p.a.
    Fixed 1 year
    Comparison rate
    6.30 % p.a.
    Initial monthly repayment
    $2,867
    Go to site

    Lock in a competitive fixed interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan.There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a speedy online application. Get the flexibility of loan split options and redraw facility. No offset account available for fixed rate proportion of loan. Other fees may be applicable. T&Cs apply.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 2 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.79 % p.a.
    Fixed 2 years
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $2,931
    Go to site

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    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.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    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.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.33 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    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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**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 the amount and term you entered.


* 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.