March RBA decision: interest rates remain at 1.50%
Tuesday 06 March 2018
The Reserve Bank board has kept rates steady for a 19th straight month with the official cash rate remaining at 1.50% following today’s meeting in Sydney.
The decision to keep interest rates on hold will come as little surprise to many experts, especially given that a number of key players have publicly checked their expectations of a potential rate change in the last few weeks.
In his statement today, Reserve Bank Governor Philip Lowe indicated that while there has been encouraging growth in the Australian economy, inflation still remained below target and wage growth continued to be low.
"Notwithstanding the improving labour market, wage growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wage growth over time," he said.
"The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual."
With many experts now predicting that a rate change is unlikely to come until the end of 2018 or the beginning of 2019, Mozo Product Data Manager Peter Marshall stated that a number of softer than expected key indicators were responsible for the dampened outlook.
“Both employment and wages have experienced slower than expected growth which, as a result, is keeping pressure on many household budgets across the country,” he said.
“Given the current state of these indicators it’s difficult to see a situation, at least in the short term, where the RBA is comfortable with raising the cash rate. That’s why we’ve seen a shift in sentiment in the last few weeks towards a potential rate change happening at the end of the year instead.”
Variable rates sharpen as lenders compete for customers
With the official cash rate once again staying steady, the outlook for borrowers remains positive - especially given the continued competition among lenders in the last month which has seen a number of variable rates, particularly for those making principal and interest repayments, sharpen.
In fact, there have been two changes in the Mozo database to market-leading variable loans for owner-occupiers making principal and interest repayments in the last month alone.
Have a look at some of the lowest home loan rates currently* in the Mozo database below:
Best variable rate home loan offers
- Reduce Home Loans Rate Lovers Variable Home Loan - 3.49% (comparison rate: 3.57%)
- loans.com.au Essentials Variable 80 - 3.52% (comparison rate: 3.54%)
- Tic:Toc Variable Home Loan - 3.52% (comparison rate: 3.53%)
- FreedomLend Variable Home Loan - 3.54% (comparison rate: 3.55%)
- Homestar Variable Rate Loan - 3.54% (comparison rate: 3.59%)
Best fixed rate home loan offers (3 year term)
- SCU My Life Home Loan - 3.69% (comparison rate: 4.00%)
- Move Lockit 3Y Special Offer - 3.69% (comparison rate: 3.96%)
- Greater Bank Discount Ultimate Home Loan - 3.74% (comparison rate: 4.45%)
- Newcastle Permanent Fixed Rate Home Loan - 3.74% (comparison rate: 4.59%)
- Queenslanders Credit Union Fixed Rate Home Loan Special - 3.78% (comparison rate: 4.36%)
Still no relief in sight for savers
While lenders are competing for business from borrowers, Australians trying to get the best return on their savings are going to need to remain patient for a future rate rise and potential boost to account interest rates.
While a number of savings account and term deposit rates have continued to trend downwards in the past month, there are still plenty of rewarding offers available for those who are willing to shop around.
To help you on your way, here are some of the best ongoing savings account and term deposit rates currently* in the Mozo database:
Best ongoing savings account offers
- AMP Bett3r Save Account - 3.00% (if you make a minimum deposit of $2,000 into your linked Bett3r Pay Account every month)
- UBank USaver with Ultra Transaction Account - 2.87% (if you deposit at least $200 into the account or a linked Ultra Transaction Account every month)
- ME Online Savings Account - 2.85% (if you make a weekly Tap & Go purchase with your ME Everyday Transaction Account Debit MasterCard)
- Australian Unity Active Saver - 2.80% (if you make a minimum deposit of $250 and no withdrawals in the month)
- ING Savings Maximiser - 2.80% (if you make a minimum deposit of at least $1,000 a month from a linked Orange Everyday account as well as five purchases on your credit or debit card)
- RAMS Saver Account - 2.80% (if you make a minimum deposit of $200 and no withdrawals in the month)
Best term deposit offers (based on a balance of $25,000)
- 1 Year: 2.75% ME
- 2 Years: 2.90% ING and Police Bank
- 3 Years: 3% Big Sky, Greater Bank, Heritage Bank, Maitland Mutual, ME, PCCU, QBANK, Qudos Bank
- 4 Years: 3.10% Greater
- 5 Years: 3.20% Greater
Interested in checking out even more offers? Start comparing today at the Mozo savings account and term deposit comparison hubs, and don’t miss out on all the recently-released Mozo Experts Choice Deposit Account winners!
*Rates accurate as of March 6, 2018.
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