RBA leaves the official cash rate at 2% again - but will it last?

Kelly Emmerton

Tuesday 01 March 2016

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:

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:

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.

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