RBA keeps record low 1.50% cash rate steady at April meeting

The Reserve Bank board has once again kept the the official cash rate on hold at a record low 1.50% following today’s meeting in Sydney.

The decision caps a 20th straight month without a move in interest rates, with the last shift a 25 basis point cut back in August 2016.

In his statement, Reserve Bank Governor Philip Lowe suggested that maintaining the cash rate would help to provide continued, sustainable growth in the economy and the RBA’s targeted level of inflation.

“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.”

The third consecutive hold for the year comes as many commentators reassessed their earlier forecasts of a 2018 change, with Mozo’s Product Data Manager Peter Marshall suggesting that in light of the sluggish economic performance so far this year, the RBA may be forced to keep rates on hold for the rest of 2018.

“The RBA has previously declared its intention to raise rates should a number of key indicators be met, but given the underwhelming economic performance many of these indicators have failed to meet expectations which means the RBA has no scope for a rate change - at least, not as things currently stand,” he said.

Lenders trim both variable and fixed rate home loans

With the cash rate on hold at a record low 1.50% for at least another month, the outlook continues to look rosy for borrowers in the short-term, particularly given the continued competition among home loan lenders.

Lenders have reduced rates on both variable and fixed rate home loans in the past month for owner-occupiers as well as investors, including a number of big bank reductions to fixed rate loans and some increased competition in the market-leading position for variable rates.

Here are 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 - 3.39% (comparison rate: 3.46%)
• BIDeloan SMARTeloan - 3.39% (comparison rate: 3.84%)
• Easy Street Standard Variable New Money Offer - 3.49% (comparison rate: 3.52%)
• FreedomLend Variable Home Loan - 3.49% (comparison rate: 3.55%)
• loans.com.au Essentials Variable - 3.52% (comparison rate: 3.54%)
• Tic:Toc Variable Home Loan - 3.52% (comparison rate: 3.53%)
  

Best fixed rate home loan offers (3 year term)

• Greater Bank Discount Ultimate Fixed 3.74% (comparison rate: 4.45%)
• UBank UHomeLoan Fixed 3.74% (comparison rate: 4.08%)
• Newcastle Permanent Fixed Rate 3.74% (comparison rate: 4.59%)
• UniBank Fixed Option 3.79% (comparison rate: 4.99%)
• Teachers Mutual Bank Fixed Option 3.79% (comparison rate: 4.99%)
• Australian Unity Health, Wealth and Happiness Fixed Rate - 3.79% (comparison rate: 4.24%)
• IMB Fixed Home Loan - 3.79% (comparison rate: 4.77%)

Silver lining for savers as term deposit rate rises outweigh cuts  

While the bulk of the competition among banks remains geared towards borrowers, savers may have found something to smile about in the past month with figures from the Mozo database showing that term deposit rate rises outweighed cuts for just the second time in the last 18 months.

Australians looking for a better return on their savings account may have to wait a little while longer though after AMP followed the general trend in 2018 by announcing a significant reduction to its market-leading Bett3r Account from 3.00% down to 2.25%, which will kick in on May 1. 

Conversely, RAMS bucked the trend by upping the bonus rate on its Saver Account from 2.80% to 3.00% - just three months after it had dropped the rate.

Check out some of the best rates currently* in the Mozo database for savings accounts and term deposits below.  

Best ongoing savings account offers

• AMP Bett3r Save Account - 3.00% (when you make a minimum deposit of $2,000 into your linked Bett3r Pay Account each month)
• RAMS Saver Account - 3.00% (when you make a minimum deposit of $200 and no withdrawals each month)
• UBank USaver with Ultra Transaction Account - 2.87% (when you deposit at least $200 into the account or a linked Ultra Transaction Account each month)
• ME Online Savings Account - 2.85% (when you make a weekly tap and go purchase with a ME Everyday Transaction Account Debit MasterCard)
• Australian Unity Active Saver - 2.80% (when you make a minimum deposit of $250 and no withdrawals each month)
• ING Savings Maximiser - 2.80% (when you make a minimum deposit of at least $1,000 a month from a linked Orange Everyday account as well as at least five purchases on your credit or debit card)
  

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

• 1 Year: 2.80% ME
• 2 Years: 2.90% Police Bank and ING
• 3 Years: 3.00% Big Sky, Greater Bank, Heritage Bank, Maitland Mutual, ME, PCCU, QBANK, Qudos Bank
• 4 Years: 3.10% Greater
• 5 Years: 3.20% Greater

For other great offers to boost your savings head over to the Mozo term deposit and savings account comparison hubs, or if you’re after an award-winning home loan deal don’t miss the recently announced 2018 Mozo Expert Choice Awards.  

*Rates accurate as of April 3, 2018.