RBA leaves interest rates on hold at 1.50% in first meeting of 2017

By Mozo Editorial · · 3 min read
Fact Checked
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As expected by the vast majority of analysts, the Reserve Bank has opted to leave interest rates on hold at 1.50% at its first board meeting of 2017.

Amid global turbulence following Donald Trump’s inauguration as President of the US and rising political tensions around the world, it’s no surprise that the RBA chose to cool its heels and proceed into 2017 with caution.

In his statement, Reserve Bank Governor Philip Lowe said, “Above-trend growth is expected in a number of advanced economies, although uncertainties remain," and mentioned both China and the US.

Although we saw weaker than expected growth at home in Australia, the RBA is hoping to see inflation rise to the desired 2% mark in 2017, making further rate cuts unlikely and unnecessary.

"In Australia, the economy is continuing its transition following the end of the mining investment boom. GDP was weaker than expected in the September quarter, largely reflecting temporary factors. A return to reasonable growth is expected in the December quarter," Lowe added.

Mozo’s Data Manager Peter Marshall recently expounded upon the unlikeliness of a February change, and predicted that Australia would see a rate increase halfway through the year - and no changes before then.

Time to lock in a home loan rate

The RBA may be keeping rates on hold, but the banks have other ideas. January saw 50 providers hike rates on home loans, according to Mozo’s Banking Roundup, with a 0.10% increase being the most common.

Marshall said that these out of cycle rate hikes mean it’s likely time for borrowers to lock in a fixed interest rate, as banks aren’t likely to pass on any rate cuts, even if the RBA does decrease later in the year.

If you’re looking for a fixed rate mortgage to get you through the bumpy ride ahead, check out these top options:

Best fixed rate home loan offers

But if you prefer the flexibility of variable rates, it’s not all doom and gloom either. Here are some of the top offers at the moment:

Best variable rate home loan offers

Savings on their way South

Although rates are rising for borrowers, savers are still suffering cuts to already low interest rates. 3 out of 4 of the big banks have cut rates in 2017, along with a number of smaller challenger banks.

But there are still some good offers on the market if you know where to look. Here are some of the top places for your cash stash:

Best savings accounts
  • ME Online Savings Account - 3.05% (when you make a weekly Tap & Go purchase with your ME Everyday Transaction Account Debit MasterCard)AMP Bett3r Save Account - 3.00% (with a minimum deposit of $2,000 per month into linked Bett3r Pay Account)Australian Unity Active Saver - 3.00% (with a minimum deposit of $250 and no withdrawals in the month)ING DIRECT Savings Maximiser - 3.00% (when you also have an Orange Everyday and deposit $1,000 each month)RAMS Saver Account - 3.00% (with a minimum deposit of $200 and no withdrawals in the month)

See our savings account comparison table to check out the other top deals on the market.

As with home loans, Marshall said it might be time for savers to look at locking in a rate before things get worse. So for long term savers, term deposits of 12 months or more may offer a better return on their rainy day fund.

Best term deposits

Check out other term deposit options with our term deposit search tool.

Want to stay up-to-date with the latest changes in the world of finance? Don’t forget to sign up for our monthly newsletter, the Mozo Banking Roundup.

Read last month's Reserve Bank interest rates update.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 27 July 2024 Important disclosures and comparison rate warning*

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    $2,995
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    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.

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    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

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    $3,027
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    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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    • Owner Occupier
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    • LVR <80%
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    6.09 % p.a.
    Variable
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    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    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.

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    $3,043
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    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.

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    $3,079
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  • Fixed Rate

    • Owner Occupier
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    6.54 % p.a.
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    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

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image of houses

Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

Learn more

* 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.