April RBA decision: rates on hold
At its meeting today, the Reserve Bank of Australia decided to leave the official cash rate on hold at 4.25%
No relief for borrowers
The RBA's decision today to keep the cash rate steady at 4.25% comes as bad news for the nation's homeowners who were hoping to get some relief from the out of cycle rate hikes passed on by Australia's major lenders in recent months.
The RBA board's view was the setting of monetary policy was appropriate with "growth expected to be close to trend, inflation close to target and lending rates close to average."
The Feb / March rate increases were the largest out-of-cycle rate changes in the Australian home loan market since the Global Financial crisis started, with lenders increasing their standard variable rates by an average of 10 basis points - even more than the original ANZ rate change of 6 basis points.
One quarter of lenders bucked the trend and kept their rates on hold to capitalise on customer dissatisfaction with the Big 4 banks. Of the lenders to leave rates on hold, two thirds were mutuals such as Teachers Mutual Bank and Community First, and one third were online lenders and challenger banks such as MyRate and ME Bank.
It is unlikely that homeowners will be hit with another big round of rate hikes in April, but all eyes are squarely on ANZ to see if they make any changes to their monthly rates decision on Friday the 13th!
New round of competition for deposits
The stable cash rate appears to be good news for the nation's savers. March kicked off a new round of competition for deposits, with the volume of savings account rate increases outpacing decreases for the first time in 2012.
Commonwealth Bank, Westpac and St George were among the providers to increase savings rates in an effort to compete more effectively against the direct providers and challenger banks who are aggressively acquiring market share right now.
Term deposit rates for longer terms are also on the rise, with 15 providers lifting their one year term deposit rates in March by an average 29 basis points.
Read last month's Reserve Bank interest rates update.
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A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
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UHomeLoan
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1.75% p.a.
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UHomeLoan
$0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
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Read our Mozo Review to learn more about the UHomeLoan
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Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
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Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
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^See information about the Mozo Experts Choice Home Loans Awards
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