March RBA decision: interest rates remain at 1.50%

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

Best fixed rate home loan offers (3 year term)

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

Best term deposit offers (based on a balance of $25,000)

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.

Read last month's Reserve Bank interest rates update.

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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, loan amount and term entered. 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.

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