RBA announces official cash rate will remain at 2%. Again.

By Kelly Emmerton · · 4 min read
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Experts had been predicting that the cash rate would remain on hold at 2% after the RBA’s April announcement and those predictions have proved true, with the record low rate locked in for the eleventh month in a row.

Despite a rise in the Aussie dollar, domestic growth and commodity prices are solid, and  experts said the economy is stable enough that they wouldn’t expect the RBA to upset the optimistic outlook with a cut just yet.

In a statement, Governor Glenn Stevens said that, “Under present circumstances, an appreciating exchange rate could complicate the adjustment under way in the economy.”

He added that, “Low interest rates are supporting demand, while supervisory measures are working to emphasise prudent lending standards and so to contain risks in the housing market. Credit growth to households continues at a moderate pace, albeit with a changed composition between investors and owner-occupiers.”

With next month’s RBA announcement falling on the same day as the budget announcement - which Prime Minister Malcolm Turnbull brought forward a week - and the potential for a double dissolution election in July, experts are predicting further stability for the official cash rate. Some have suggested that the 2% rate will hold steady throughout June and July as the benefits of a cut diminish amidst political and economic factors.

However, the strengthened Aussie dollar and its potential effect on growth and inflation mean many are still expecting cuts later in the year.

What does this mean for your home loan?

Although this month has seen little change in home loan offers, it’s no time for Aussie borrowers to start slacking off on their mortgage situation. Regular reviews of home loan rates can help ensure borrowers are getting the best deal possible at any given time, as an outdated home loan deal could be costing thousands of dollars each year.

For example, on a $700,000 home loan, the average rate of 4.71% would cost the borrower $492,420 in interest over a 25 year loan period. The same loan, with one of the lowest variable rate home loan offers in Mozo’s database of just 3.94% would cost the borrower just $401,512 in interest over the life of the loan. That’s a saving of $90,908 all up, or just over $300 each month.

To help you snag a great home loan deal, Mozo’s experts have rounded up the best home loan offers on the market at the moment.

Best variable rate home loans:

(For owner occupiers with LVR 80% or below)

Plus a bunch of providers offering home loans at a 3.99% rate. Find them here.

Best fixed rate home loans:

  • 1 year – 3.50% from Illawarra Credit Union (comparison rate 4.31%)
  • 2 years – 3.85% from Illawarra Credit Union (comparison rate 4.30%)
  • 3 years – 3.89% from Illawarra Credit Union (comparison rate 4.27%)
  • 4 years – 4.24% from Greater Building Society (comparison rate 4.74%)
  • 5 years – 4.24% from Greater Building Society (comparison rate 4.73%)

You can find all the best home loan deals in our home loan comparison table.

What about your savings?

While low interest rates are good news for borrowers, savers have had it a lot tougher. Although there weren’t many changes in savings accounts, most of those that did happen were cuts, with the average interest rate now sitting at just 2.31%.

On a savings stash of $10,000, this rate would mean $1,223 extra in interest payments over a five year period. But to help savers grow their pile even quicker, Mozo has taken a few of the top results from our savings account comparison and crunched the numbers on what difference the higher rates could make to your savings.

Here are the results:

Account Interest rate and conditions
 Interest on $10,000 over 5 years*
ME Online Savings Account 3.60% - as long as you make a weekly purchase using PayPass Tap & Go on a linked ME EveryDay Transaction Account $1,969
ING Direct Savings Maximiser 3.50% - as long as you deposit at least $1,000 a month and have a linked Orange Everyday Account $7,376
UBank USaver with Ultra Transaction Account 3.37% - if you make a $200 deposit into either account each month $2,883
RaboDirect Notice Saver 3.20% - for 90 days, but you have to give notice to withdraw funds $1,733
Bankwest Hero Saver 3.15% - with at least $200 a month deposit and no withdrawals $2,682
RAMS Saver 3.15% - as long as you deposit $200 a month and don’t make any withdrawals $2,682

*Includes required monthly deposits if they apply.

To work out what you could save with one of these high interest savings accounts, check out our savings calculator.

*Rates and calculations are accurate at the time of writing, but may change. Please click on highlighted product for today’s rates.

Read last month's Reserve Bank interest rates update.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 24 November 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

Promoted

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

Showing 6 of 430 home loans. Use the filters to see more
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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. You can change the loan amount and term in the input boxes at the top of this table. 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.

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.