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:

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:

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.

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 11 September 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

  • 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.

  • 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.

  • 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.

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* 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.