RBA leaves the official cash rate at 2% again - but will it last?
The Reserve Bank of Australia has announced the cash rate will remain at 2% in March, for the tenth month in a row, although many economists are predicting that the streak won't last.
Despite turbulent global conditions last month plus domestic figures that show a rising unemployment rate and lowered expectations for business investments, experts say the domestic market is relatively stable, which has been reflected in the RBA board’s decision to hold the cash rate at 2% yet again.
Governor Glenn Stevens said, “the expansion in the non-mining parts of the economy strengthened during 2015 despite the contraction in spending in mining investment. This was reflected in improved labour market conditions. The pace of lending to businesses also picked up."
He added that "the Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target."
Even so, experts have predicted that low growth and inflation, combined with the potential of the Aussie dollar to rise, will prompt the RBA to cut rates later this year.
Stevens didn't discount the possibility, saying, "continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand."
Home loan rundown
Although the official cash rate remains on hold, Aussie borrowers should avoid becoming complacent, and always keep one eye on their own mortgage situation to ensure they’re getting the best possible deal.
For example, our home loan comparison calculator shows that on a $500,000 home loan over a 25 year period, switching from the average home loan rate of 4.73% to the lowest in Mozo’s database of 3.86%, could save a homeowner over $73,000 in interest.
To help borrowers find the best deal for them, our experts have identified some of the top home loans in the Mozo database:
Variable rates
Variable rates have been creeping up during February, but there are still some great deals to be found, with a wealth of lenders offering rates under the 4% mark, including:
Homestar Basic Refinance Loan – 3.86% (comparison rate 3.90%)
Mortgage House Pure and Simple Variable Home Loan – 3.89% (comparison rate 3.99%)
QPCU Classic Home Loan – 3.97% (comparison rate 3.97%)
UHomeLoan Value Offer - 3.99% (comparison rate 3.99%)
Fixed rates
On the other hand, fixed rates have been more likely to drop, with selective cuts from a number of lenders. Some of the best deals to be found include:
1 year – Illawarra Credit Union Fixed Rate Home Loan - 3.50% (comparison rate 4.31%)
2 years – Illawarra Credit Union Fixed Rate Home Loan - 3.85% (comparison rate 4.30%)
3 years – Illawarra Credit Union Fixed Rate Home Loan - 3.89% (comparison rate 4.27%)
4 years – Police Credit Union Fixed Rate Home Loan - 4.29% (comparison rate 5.06%)
5 years – Greater Building Society Ultimate Home Loan Fixed Package - 4.34% (comparison rate 4.76%)
Check out all the other great deals available in our home loan comparison hub.
Savings account summary
The low interest rate market has not been kind to savers with the average savings account rate now sitting at just 2.36%.
Luckily, Mozo held its Experts Choice Awards in February and revealed the savings accounts which provide the best return for a customer’s money.
For those searching for a savings account with a high ongoing bonus rate, Mozo’s experts identified these accounts as a few of the best:
ME Online Savings Account - 3.60% if you make a weekly purchase using PayPass Tap & Go on a linked ME EveryDay Transaction Account
ING Direct Savings Maximiser - 3.50% as long as you have a linked Orange Everyday Account and deposit at least $1,000 a month
UBank USaver with Ultra Transaction Account - 3.37% if you make a $200 deposit into either the USaver or linked transaction account each month
Another way Aussies can effectively save is by taking advantage of great introductory bonus rates. Some of the winners of a Mozo Experts Choice Award in this category included:
RaboDirect High Interest Savings Account - 3.50% for the first four months and 2.55% after
AMP Saver account - 3.05% for the first four months, 2.60% after
You can find the full list of Mozo Experts Choice Savings Account Award winners here, or use our savings account search tool to find the perfect place to stash your cash.
For those wanting a higher return on their money, peer-to-peer lender RateSetter is currently searching for investors and is offering Aussie savers a return of up to 9.8% p.a on 5 year investments. For a saver with $10,000 built up, this could earn them over $5,000 more than the average savings account would in the same time. Click here to find out more.
For more information on all things financial, subscribe to our monthly newsletter, the Mozo Banking Roundup.
Read last month's Reserve Bank interest rates update.
Top home loans - last updated February 27, 2021
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.
CompareCompareSmart 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.
CompareCompareBasic 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
UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
2.34% p.a. variable2.34% p.a.Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
CompareCompareUHomeLoan - Discount Offer
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
- interest rate
- 2.34% p.a. variable
- comparison rate
- 2.34% 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
- $100,000
- maximum borrowing amount
- -
- 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 UHomeLoan - Discount Offer
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.^
CompareCompareCelebrate 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
Special Fixed Rate Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
1.99% p.a.
fixed 4 years3.45% p.a.Ability to split your loan between fixed and variable. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Limited time offer extended, T&Cs apply
CompareCompareSpecial Fixed Rate Home Loan
Ability to split your loan between fixed and variable. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Limited time offer extended, T&Cs apply
- interest rate
- 1.99% p.a.
fixed 4 years
- comparison rate
- 3.45% p.a.
- Upfront fees
- $0
- Ongoing fees
- $395.00 yearly
- Discharge Fee
- $0.00
- Extra repayments
- yes - free up to $25,000 p.a.
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- -
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $2,000 cashback when you refinance your home loan from another financial institution when you apply by 31 March 2021 and are funded by 31 May 2021, min $250k, LVR
Read our Mozo Review to learn more about the Special Fixed Rate Home Loan
^See information about the Mozo Experts Choice Home Loans Awards
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