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 - rates updated daily
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment
1.99% p.a.variable for 12 months and then 2.48% p.a. variable2.47% p.a.A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.
Smart Booster Home Loan
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.
- interest rate
- 1.99% p.a.variable for 12 months and then 2.48% p.a. variable
- comparison rate
- 2.47% p.a.
- Upfront fees
- $520
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - with 0.10% additional interest
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $1,000,000
- 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 Smart Booster Home Loan
Basic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR 70-80%
interest rate
comparison rate
Initial monthly repayment
2.09% p.a.
fixed 2 years2.56% p.a.Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
Basic Home Loan
Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
- interest rate
- 2.09% p.a.
fixed 2 years
- comparison rate
- 2.56% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- 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
- $750,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Basic Home Loan
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
2.19% p.a. variable2.19% p.a.Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.
Celebrate Variable Home Loan
Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.
- interest rate
- 2.19% p.a. variable
- comparison rate
- 2.19% 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
- 60.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- 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 Celebrate Variable Home Loan
UHomeLoan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
1.75% p.a.
fixed 3 years2.22% p.a.$0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
UHomeLoan
$0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
- interest rate
- 1.75% p.a.
fixed 3 years
- comparison rate
- 2.22% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free up to $20,000 p.a.
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $395 Establishment fee waived for fixed rate loans that settle by 31 March 2020. Receive 1.75% 3 year fixed rate when you apply by 29 April 2021 and settle within 90 days.
Read our Mozo Review to learn more about the UHomeLoan
Discount Great Rate Home Loan (Fixed, Owner Occupier, Principal & Interest)
LVR<90%, over $150k
interest rate
comparison rate
Initial monthly repayment
1.69% p.a.
fixed 1 year3.49% p.a.Get one of the lowest rates on the market with this fixed rate mortgage. Available with just a 10% deposit. Guarantor option available. NSW, QLD and ACT residents only. Mozo Experts Choice Awards - Home Lender Bank of the Year 2020.
Discount Great Rate Home Loan
Get one of the lowest rates on the market with this fixed rate mortgage. Available with just a 10% deposit. Guarantor option available. NSW, QLD and ACT residents only. Mozo Experts Choice Awards - Home Lender Bank of the Year 2020.
- interest rate
- 1.69% p.a.
fixed 1 year
- comparison rate
- 3.49% p.a.
- Upfront fees
- $180
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - fee applies
- Redraw facility
- yes
- Offset account
- no
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Discount Great Rate Home Loan
^See information about the Mozo Experts Choice Home Loans Awards
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