New year, same home loan interest rates: Reserve Banks holds the cash rate at 4.35%

By Evlin DuBose · · 4 min read
Fact Checked
Advertiser disclosure
RBA governor Michele Bullock interest rate announcement

In its first decision of 2024, the Reserve Bank of Australia (RBA) opted to keep the official cash rate on hold at 4.35% for February. 

After two days of deliberations (the new format of RBA monetary policy meetings), RBA governor Michele Bullock announced that the high interest rate environment is successfully working to curb inflation.

“Inflation continued to ease in the December quarter,” explained Bullock in a post-meeting statement.

“Higher interest rates are working to establish a more sustainable balance between aggregate demand and supply in the economy.”

Most property experts and economists expected a rate hold today. The last RBA rate hike was in November 2023, on the heels of a worrying spike in inflation. 

The holiday spending season, however, proved slower than expected. With headline inflation now slipping to 4.1%, the RBA wants to wait and see what it’ll do before hitting the cash rate again. 

“While recent data indicate that inflation is easing, it remains high,” says Bullock. “The Board expects that it will be some time yet before inflation is sustainably in the target range. 

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out.”

Indeed, this may be the last rate hike we see for a long while, so 4.35% might be how high interest rates will go in 2024. 

If inflation continues to slow its pace of growth (a process called “disinflation”), then it’s on track to hit the top of the RBA’s target band of 2% to 3%. When that happens, the RBA will make the first rate cut since November 2020.

For home loans, a rate hold is good news. Lenders have been making individual adjustments in the last few months to their top interest rates, but no added pressure from the RBA means no massive sweep of rate hikes – and no extra dollars on mortgage repayments. 

A rate hold also gives buyers and borrowers an opportunity to compare home loans with some certainty. After all, if your home loan interest rate isn’t going to change right after you apply, you can genuinely compare the long-term value between two mortgages. 

However, Marshall warns against waiting for rates to come down and make home buying more affordable. The housing market is still projected to stay strong, with an anticipated 5% growth in home values in 2024 from CoreLogic. 

Essentially? If you can get in now, get in now. If you’re already in, a rate cut is just a glimmer of hope on the horizon.

When will home loan interest rates decrease?

RBA governor Michele Bullock discussing monetary policy

Home loan interest rates will decrease when a couple things happen:

  • Inflation drops to 3%.
  • Household spending softens.
  • Unemployment rises, usually at least over 4%.

The absolute guarantee of a rate cut is a recession. At the moment, a recession isn’t looking likely – phew – but this means we’ll have to wait until inflation drops into the RBA’s target band. 

Once that happens, the RBA will likely slash the cash rate 25 basis points at a time until it hits ‘neutral’ territory again, typically between 2.5% and 3.5%. 

Economic experts at the Big Four Australian Banks (Westpac, CommBank, NAB, and ANZ) suspect inflation will reach the RBA’s desired target in the next six to eight months. The earliest cash rate cut forecast takes place in September 2024.

Rate changes operate with a delay, so borrowers can likely expect their home loan payments to start decreasing around six to eight weeks after the first rate cut. That is, if your lender passes the savings along at all. (They don’t have to). 

“The RBA will be reluctant to signal any cuts ahead of time. So perhaps a month before they make the first cut, they may start to soften their language and indicate cuts are coming,” explains Peter Marshall.

However, Marshall reckons the RBA will need to decrease interest rates sooner rather than later if they want to achieve a ‘soft landing’, i.e. kill inflation without killing the economy. 

“I think they’ll start alleviating the interest rate pain sooner in the cycle than later, rather than holding out until the last minute. Cutting at the eleventh hour could be dangerous.”

Will banks change home loan rates after the February RBA decision?

A rate hold doesn’t mean home loan lenders stay idle. In fact, plenty of rate changes are still getting tracked in the Mozo home loan database. Macquarie even slashed its variable rates just last week. 

Variable interest rate home loans aren’t likely to truly drop for a while – at least until the RBA starts cutting rates –  but fixed rate home loans have already started inching down. This is because fixed rate home loans are predictive. Lenders price rates based on what they think will happen during the fixed term. Fixed rates coming down mean lenders expect rate cuts later this year.

But hold on: unless you spot a good deal, it may not be worth it to fix right now. They still have farther to fall. 

We’ll track home loan changes as they come in. In the meantime, you can compare low rate home loans in the table below.

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*

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.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    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.

  • 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.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    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.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • 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.

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,995
    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.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • 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.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    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.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    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.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.38 % p.a.
    Initial monthly repayment
    $3,043
    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.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    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.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.54 % p.a.
    Fixed 2 years
    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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.

^See information about the Mozo Experts Choice Home Loan Awards

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.

Compare home loans