No April surprise as RBA keeps rates locked at 1.50%

The Reserve Bank Board has once again held the official cash rate at a record low 1.50% following it’s monthly meeting in Sydney this afternoon.

The Board’s decision to maintain interest rates in April marks the 29th consecutive meeting without change, with the most recent move in either direction dating all the way back to August 2016 when rates were cut from 1.75% to 1.50%.

"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," said RBA Governor, Philip Lowe, in his post-announcement statement. 

"Taking account of the available information, the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting."

RELATED: Australia’s cheapest home loan of 2019

Despite the RBA’s recent rate consistency pundits and experts alike have continued to make noise suggesting a rate cut may be just around the corner, especially given the state of many key economic indicators at home and abroad.

According to Mozo Product Data Manager, Peter Marshall, it’s just a matter of time until interest rates are cut, with the country’s low unemployment rate one of the only indicators holding the RBA back.

“The last thing that the RBA are pinning their reluctance to is the unemployment rate which has held up so far, but I think that it’s only a matter of time until they crack on that criteria given that, despite an increase in part time jobs, we’re actually losing full time jobs,” Marshall said.   

“Combine that with the flow on effects from the housing downturn as well as an extremely low CPI and it really wouldn’t surprise me if the RBA chose to cut rates twice this year - potentially as early as May.” 

Are banks already adjusting for a cut?  

Pundits aren’t the only ones predicting a future cut though, as there are increasing signs that banks are already adjusting their product rates in anticipation.   

“There have been plenty of signs that banks are preparing for a cut. Fixed rate home loans have been falling for the last few months and term deposits are really backing off quickly,” said Marshall.

“UBank has cut term deposit rates twice in the last three weeks which is very unusual for them, and I consider that one of the best indicators that they believe that this is the direction we’re going in.”

But for many Australians, the main focus of any potential rate cut will be the impact it will have on their home loan rates. So what are lenders likely to do in the event of an RBA cut?  

If we wind back time to August 2, 2016 (the day of the last RBA cut), it’s clear that the major banks were quick to announce cuts to their respective standard variable rate home loans, but none of the four major banks actually passed on the full 25 basis point cut.

BankCut Passed OnDate Effective
ANZ12 basis points (0.12%)12/08/2016
Commonwealth Bank13 basis points (0.13%)19/08/2016
NAB10 basis points (0.10%)19/08/2016
Westpac14 basis points (0.14%)23/08/2016

While it’s unclear how the banks would respond to a potential rate cut in 2019, Marshall suggested that mortgage holders shouldn’t get their hopes up.

“The banks will likely pass on maybe half of what the RBA cut rates by. Having said that, funding costs have started to ease off, so we could get a nice surprise and find that the banks are more prepared to pass on a full RBA rate cut.”

RELATED: This week in banking - Moula, UBank and more

Don’t want to wait for an official rate cut to see if you can snag a discount on your home loan? Head over to the Mozo refinance home loans comparison hub to see if you can switch to a more competitive rate today.

Read last month's Reserve Bank interest rates update.

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Last updated 14 January 2025 Important disclosures and comparison rate warning*
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  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.89 % p.a.
    Fixed 1 year
    Comparison rate
    6.30 % p.a.
    Initial monthly repayment
    $2,962
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  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    5.69 % p.a.
    Fixed 2 years
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
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    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.

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    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    5.69 % p.a.
    Fixed 2 years
    Comparison rate
    6.30 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Convenient offset account. No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • 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.

  • Special Real Deal Home Loan

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    • Principal & Interest
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.03 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Enjoy no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and eligibility criteria apply.

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    • Principal and Interest
    • LVR <90%
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    6.04 % p.a.
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    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
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    6.14 % p.a.
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    6.16 % p.a.
    Initial monthly repayment
    $3,043
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    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

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    6.14 % p.a.
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    6.39 % p.a.
    Initial monthly repayment
    $3,043
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    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

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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.

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