RBA interest rates stay put at 1.50% as March property season begins

The Reserve Bank has opted to keep the official cash rate steady at 1.5% in its March meeting, an outcome expected by the vast majority of economists.

In his statement, Reserve Bank Governor Philip Lowe said, "Conditions in the global economy have continued to improve over recent months. Business and consumer confidence have both picked up."

"The outlook continues to be supported by the low level of interest rates," he added.

Two major factors in the RBA’s policies for the rest of 2017 will likely be Australian house prices - which are still sky high and showing no signs of declining - as well as an expected rate rise from the US Federal Bank at their meeting on March 14 and 15.

While a US rate increase gives the RBA room to hike Australian rates without inflating the Aussie dollar and higher interest rates may decrease mortgage availability and therefore house prices, analysts are largely expecting caution from the RBA and stagnant rates for the rest of the year.

Lock up your home loan: rates on the rise

Despite the RBA keeping interest rates on hold, this is no indication that the banks will keep their rates steady. Mozo has seen a number of home loan rate hikes from banks recently. Investors in particular have had a hard couple of months, being hit with not only rate hikes, but also tightened lending criteria.

And there are likely more rate rises ahead for borrowers, so now may be the time to lock in a fixed rate mortgage. Here are the top offers around at the moment:

Best fixed rate home loan offers

• 1 year - 3.59% - Greater Bank (comparison rate: 4.42%)
• 2 year - 3.69% - Bank Australia  (comparison rate: 4.31%)
• 3 year - 3.59% - Easy Street (comparison rate: 4.01%)
• 4 year - 3.75% - BCU (comparison rate: 4.24%)
• 5 year - 4.10% - BCU (comparison rate: 4.37%)

For borrowers who prefer variable rates, there are still some good deals on the table:

Best variable rate home loan offers

• Reduce Home Loans Rate Buster Variable - 3.39% (comparison rate: 3.46%)
• Homestar Owner Occupier Loan - 3.49% (comparison rate: 3.53%)
• FreedomLend Variable Home Loan - 3.53% (comparison rate: 3.53%)
• loans.com.au Essentials Variable - 3.59% (comparison rate: 3.61%)
• Mortgage House Special Variable Home Loan - 3.59% (comparison rate: 4.03%)

Savings hit rock bottom

Although the recent spurt of rate cuts for beleaguered savers has slowed, things still aren’t looking great for Aussies’ rainy days funds. NAB cut the interest rate on its savings account last month, which means all four big banks have now decreased rates in 2017, and the out of cycle rate cuts may continue to pummel savers in coming months.

But it’s not all doom and gloom. For those looking to build up their savings stash, there are still some decent interest rates on offer:

Best savings accounts

• ME Online Savings Account - 3.05% (when you make a weekly Tap & Go purchase with your ME Everyday Transaction Account Debit MasterCard)
• AMP Bett3r Save Account - 3.00% (with a minimum deposit of $2,000 per month into linked Bett3r Pay Account)
• Australian Unity Active Saver - 3.00% (with a minimum deposit of $250 and no withdrawals in the month)
• ING DIRECT Savings Maximiser - 3.00% (when you also have an Orange Everyday and deposit $1,000 each month)
• RAMS Saver Account - 3.00% (with a minimum deposit of $200 and no withdrawals in the month)
• Newcastle Permanent Smart Saver Account - 3.00% (when you increase the account balance by $150 (excluding interest) and make no more than two withdrawals in the month)

Check out our savings account comparison table to see the rest of the deals in the market.

Unfortunately, term deposit rates are also on the decline. Rates on both short and long term offers from a number of providers have been cut in recent months, but for savers who know where to look, there are still some good offers ready to be locked in.

Best term deposits

• 1 year - 3.00% - Teachers Mutual Bank, Unibank
• 2 year - 3.10% - Maitland Mutual Building Society, BankVic, Qudos Bank
• 3 year - 3.20% - Maitland Mutual Building Society, St.George, Qudos Bank, Greater Bank, CommBank, Bank of Queensland, Bank of Melbourne, BankVic, BankSa
• 4 year - 3.20% - Arab Bank Australia, QT Mutual Bank
• 5 year - 3.30% - RaboDirect

Find other term deposit options with our term deposit search tool.

You can also take a look at the winners of our recent Mozo Experts Choice Deposit Awards to find the best of the best deals for savers, or stay up-to-date with the latest changes in the world of finance by signing up for our monthly newsletter, the Mozo Banking Roundup.