RBA's July decision: rates on hold at 2.75%

At its monthly meeting today, the Board of the Reserve Bank of Australia decided to leave the official interest rate on hold at 2.75%.

In a statement, RBA Governor Glenn Stevens said: "the easier financial conditions now in place will contribute to a strengthening of growth over time, consistent with achieving the inflation target".

Break down the Bankworld jargon for me, please!

This month's decision is a cautious one, informed by a pretty mixed bag of economic signs.

May's 25 basis point cut has produced optimal and desired results, with the previously high Australian dollar now sitting well below parity with its American counterpart. This downward turn has provided a much boost to the export sector. In line with this, manufacturing figures are also positive, responding well to the healthy trading climate.

Despite these strong indicators of current economic growth, the news isn't looking as good for the next six months. Economists are predicting a slump in employment and job creation figures, and, as ever, the decline of the mining boom continues to loom large on the fiscal horizon.

In light of the above, the Reserve Bank is essentially playing it safe, and waiting to see what the next few months will bring. The next official inflation reading will be released on July 24, and it is likely that that figure will play a big role in shaping the Board's August decision.

So watch this space, folks! It is likely that we will see further cuts before too long.

What does this mean for borrowers?

Although the Reserve Bank might not be cutting rates, there are still a few banks offering top deals on home loans, dropping their rates and competing for your money.

If you're not happy with your current rate, check out our mystery bank page to see what top notch deals we have secured from some of Australia's best banks.

Alternatively, have a look at some of our home loan picks for this month. Fixed rate options include:

  • iMortgage Fusion Fixed: 4.69% for three years (5.08% comparison)
  • UBank UHomeLoan (refinance only): 4.73% for three years (5.01% comparison)

Great variable rate offers include:

  • Loans.com.au Blackboard Special (only LVR 80%): 4.75% (4.77% comparison)
  • UBank UHomeLoan (refinance only): 4.87% (4.87% comparison)

And for savers?

Now is as good a time as any to open a high interest savings account and grow yourself a neat little nest egg.

Check out these options:

Read last month's Reserve Bank interest rates update.

Top home loans - last updated 2 March 2024

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