No change in sight: RBA kicks 2016 off with 2% official cash rate
The RBA has met for the first time in 2016 amid less than optimal global conditions, announcing that the official cash rate will remain unchanged at 2% for the ninth month in a row.
Uncertainty in the global market, including weakening growth in three of Australia’s biggest trading partners, China, Japan and the US and oil prices at a 13 year low, have prompted overseas central banks in Europe, Japan and New Zealand to cut rates to combat slow economies and deflation.
Changes at home have also had nerves mounting, as the property market boom shows signs of cooling, with annual price growth in Sydney and Melbourne slowing, and consumer and business confidence falling since December.
But recent upheaval wasn’t expected to be enough to change the outlook of the RBA - especially after the Aussie dollar’s rise last night from 70.77 to 70.97 US cents - with the Board electing to keep the cash rate steady at 2%.
Governor Glenn Stevens said in a statement that, "surveys of business conditions moved to above average levels, employment growth picked up and the unemployment rate declined in the second half of the year, even though measured GDP growth was below average. The pace of lending to businesses also picked up."
He also cited low inflation in the decision to keep the cash rate unchanged, saying, "the Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target."
A fresh look at your home loan
At the end of last year, we saw overall increases in variable home loan rates, but January altered this trend, featuring a relatively even number of rises and cuts.
The increases were mainly with owner-occupier loans, while one pattern that did continue on from the end of last year was reduction in rates for investor home loans. Throughout the month, we saw lenders reduce premiums for investors and one remove the fixed rate premium completely. The reductions on home loan rates for investors included:
- AMP Basic Package variable rate was cut by 40bp to 4.57%
- Beyond Bank Low Rate Special Variable Home Loan cut by 20bp to 4.14%
- IMB Bank Essentials Home Loan variable rate cut by 5bp to 4.56%
- ME Flexible Home Loan Member Package variable rate cut back by 30bp to 4.39%
But if you live in your own home you’ll be happy to hear some of the best variable rates in the market are also available to owner occupiers, including:
- Mortgage Simple Limited Time Offer Home Loan: 3.89% (comparison rate 4.05%)
- Homestar Owner Occupier Loan: 3.94% (comparison rate 3.97%)
- QPCU Discounted Classic Home Loan: 3.97% (comparison rate 3.97%)
(Above home loans for owner-occupiers, with an LVR under 80%)
See what other deals are on offer, including fixed rates and investor loans, using our home loan comparison tool.
What about your savings account?
The unchanged cash rate is reflected in the activity of savings rates - or rather the lack of activity. There’s been very little action on this front, with the exception of NAB increasing the ongoing bonus rate of its Online Saver account by 25bp to 3.1%.
If you’re looking for a new place to stash your cash this year for high returns, check out these top savings accounts with great introductory rate offers (conditions apply):
- P&N Bank Hi Saver: 3.50% for the first 4 months
- RaboDirect High Interest Savings: 3.50% for the first 4 months
- Bank of Sydney SuperRate Account: 3.30% for the first 4 months
There are also some great deals available on ongoing bonus rates if you’re looking for the long term (conditions apply):
- ME Online Savings Account: 3.60% if you make a weekly purchase using PayPass Tap & Go on your ME EveryDay Transaction Account
- ING Direct Savings Maximiser: 3.50% if you have a linked Orange Everyday Account and deposit at least $1,000 a month
- RAMS Saver Account: 3.40% bonus interest when you make no withdrawals and deposit $200 a month
You can also head over to our savings account comparisons page to find the perfect place for your rainy day fund.
Want to know more about the rate changes in the banking market? This is just the tip of the iceberg; for a full rundown subscribe to the Mozo Banking Roundup newsletter.
Read last month's Reserve Bank interest rates update.
Top home loans - last updated 6 December 2023
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2023
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.74% p.a. variable5.65% p.a.For refinancers only. 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 in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. 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 in as little as 10 minutes.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% p.a.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Variable
-
Home Variable Rate
Owner Occupier, Principal & Interest, Refinance Only
interest rate
comparison rate
Initial monthly repayment6.15% p.a. variable6.15% p.a.Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.
CompareCompareHome Variable Rate
Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.15% p.a.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.15% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - up to $30,000
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Home Variable Rate
-
Offset Home Loan
Package, Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.24% p.a. variable6.49% p.a.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.
CompareCompareOffset Home Loan
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.
- interest rate
- 6.24% p.a. variable
- comparison rate
- 6.49% p.a.
- interest rate
- 6.24% p.a. variable
- comparison rate
- 6.49% p.a.
- Upfront fees
- $350
- Ongoing fees
- $248.00 yearly
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Offset Home Loan
-
Mozo experts choice awards won:
- Packaged Home Loan - 2023
Variable Rate Home Loan Special Offer
Package, Owner Occupier, Principal & Interest, LVR<80%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.51% p.a.Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
CompareCompareVariable Rate Home Loan Special Offer
Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- Upfront fees
- $0
- Ongoing fees
- $395.00 yearly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $0 package fee for the first year.
Read our Mozo Review to learn more about the Variable Rate Home Loan Special Offer
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Mortgage Simplifier
LVR<80%, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.43% p.a.Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.
CompareCompareMortgage Simplifier
Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.43% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.43% p.a.
- Upfront fees
- $299
- Ongoing fees
- $0.00
- Discharge Fee
- $250.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Mortgage Simplifier
* 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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