RBA holds off on interest rate cut at May meeting
Despite intense speculation surrounding the possibility of a May rate cut, the Reserve Bank Board has once again maintained the status quo by holding the official cash rate at 1.50% at it’s monthly meeting in Sydney this afternoon.
The decision marks a 30th consecutive meeting since interest rates last moved, with Aussies needing to stretch their minds back to the RBA’s August 2016 meeting for the last time the Board cut rates from 1.75% to 1.50%.
In his post-meeting statement, RBA Governor Philip Lowe commented on the most recent inflation figures, as well as why the board decided to hold rates steady.
"The inflation data for the March quarter were noticeably lower than expected and suggest subdued inflationary pressures across much of the economy," he said.
"The Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. In doing so, it recognised that there was still spare capacity in the economy and that a further improvement in the labour market was likely to be needed for inflation to be consistent with the target."
RELATED: Lenders slash rates ahead of Reserve Bank decision
While the Reserve Bank Board may have kept their guns holstered this time around, Mozo Product Data Manager, Peter Marshall, suggests that it is most likely only a matter of time until they do pull the trigger and cut rates.
“The RBA is a very cautious organisation, so they won’t want to do anything too abruptly without paving the way for it first. That means setting the tone for a possible cut, which they’ve only just started to do,” said Marshall.
“One factor that might be holding them back is the strong unemployment rate, so there's a good chance that they'll wait for the next unemployment figure to come out before finally acting - if it’s not positive.”
Not a matter of it, but when
According to the ASX’s RBA Rate Indicator for May 6, there was a 51% chance of an interest rate cut at today’s meeting - a figure which has hovered around the 40-60% mark for the past fortnight.
And with a number of uninspiring economic indicators including a weakening economy, falling housing market and most recently, below target inflation figures, the belief that a rate cut is coming is one shared by many commentators.
“A lot of pundits brought forward their predictions of a rate cut to May on the back of the recent CPI figures, so while I never ruled a cut in today’s meeting out of contention, I thought the RBA were more likely to move in June or even July,” said Marshall.
So if the Reserve Bank Board does decide to cut rates next month, what kind of response can Australians expect from their banks?
The Mozo database has been recording possible signs for months that banks are anticipating a future drop in the official cash rate, with a host of fixed home loan and term deposit rates slashed in recent months. But what about variable rate home loans and savings accounts?
“If a cut does come, it’s very unlikely that lenders will pass on the full 25 basis points to their mortgage borrowers. There's some pressure coming as a result of the Royal Commission, so we could be pleasantly surprised, but I think it's more likely that they keep somewhere around half of it for themselves,” said Marshall.
“Savers won’t be so lucky though, as I fully expect that banks won’t hesitate to pass on any cut to savings accounts in full.”
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For now, here are some of the top variable home loan and savings account rates in the Mozo database.*
Low variable rate home loan offers*
The following offers are basic variable home loans with or without an offset account and based on an LVR of at least 80%. Check out each product’s respective review (linked) for more information on fees and features.
Rate | Lender | Loan |
---|---|---|
3.44% (3.54% comparison rate**) | FreedomLend | Variable Home Loan |
3.47% (3.51% comparison rate**) | Reduce | Rate Lovers Variable |
3.48% (3.51% comparison rate**) | loans.com.au | Smart Home Loan |
3.48% (3.66% comparison rate**) | Mortgage House | Advanced Home Loan |
3.49% (3.55% comparison rate**) | Well Home Loans | Well Balanced |
High bonus rate savings account offers*
The following ongoing bonus rate savings account offers each come with minimum requirements, so check out the linked reviews for more information.
Rate | Bank | Account |
---|---|---|
3.00% | BOQ | Fast Track Saver Account |
2.90% | CUA | eSaver Extra |
2.90% | MOVE Bank | Bonus Saver |
2.87% | UBank | USaver with Ultra Transaction Account |
2.85% | ME | Online Savings Account |
Want to compare even more offers for yourself? Don’t wait! Mozo’s home loan, savings account and term deposit comparison tables make it easy to view a range of rates and features all in the one place.
*Rates accurate as of May 7, 2019.
**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.
Read last month's Reserve Bank interest rates update.
Top home loans - last updated 29 March 2024
-
Offset Home Loan
Package, Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.15% p.a. variable6.40% p.a.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.
CompareCompareOffset Home Loan
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.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.40% p.a.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.40% p.a.
- Upfront fees
- $350
- Ongoing fees
- $248.00 yearly
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Offset Home Loan
-
Mozo experts choice awards won:
- Exceptional Value Home Lender - 2024
Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% p.a.Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
CompareCompareExpress Home Loan
Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
- Ongoing fees
- $10.00 monthly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- $3,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Express Home Loan
-
Mozo experts choice awards won:
- Fixed Rate Home Loan - 2024
- Investor Fixed Home Loan - 2024
Fixed Rate Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 2 years6.24% p.a.Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
CompareCompareFixed Rate Home Loan
Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $395.00
- Extra repayments
- yes, up to $25,000 during fixed period - fee applies
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Fixed Rate Home Loan
-
Featured Product
Ultra Low Rate <95% LVR
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.30% p.a. variable6.58% p.a.Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required. New Purchase - Metro only.
CompareCompareUltra Low Rate <95% LVR
Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required. New Purchase - Metro only.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- Upfront fees
- $790
- Ongoing fees
- $0.00
- Discharge Fee
- $795.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $350,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Ultra Low Rate <95% LVR
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.For refinancers only. 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 in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. 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 in as little as 10 minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Variable
Your selected reserve bank interest rates
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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.
^See information about the Mozo Experts Choice Home Loan Awards
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