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.

Top home loans - last updated 31 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Compare
    Details
  • Variable Home Loan 90

    Principal and Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.04% p.a. variable
    6.06% p.a.

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

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  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

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    Details
  • The Better Home Loan Special Offer

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.14% p.a.

    Enjoy a variable rate home loan with a bunch of features from Police Credit Union. Make extra repayments at any time without penalty. No monthly, annual or upfront fees. Free online redraw. Minimum 20% deposit. Qualifying criteria applies. Minimum loan amount is 200K. For new customers only. Mozo Experts Choice Home Lender Credit Union of the Year 2023.

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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.

^See information about the Mozo Experts Choice Home Loan Awards

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