RBA holds interest rates steady at 1.75% amidst global uncertainty

With global markets unsettled in the wake of Brexit and the Federal Election shaking up the domestic scene, the Reserve Bank of Australia has opted to keep interest rates on hold for now, at 1.75%.

The decision comes as no surprise, with 25 economists interviewed by Bloomberg unanimously predicting that this month’s RBA announcement would hold rates steady. However, most experts, with the notable exception of NAB, have forecast a rate cut for August.

In a statement, outgoing Governor Glenn Stevens said that, “In Australia, recent data suggest overall growth is continuing, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend."

He added that "Financial institutions are in a position to lend and credit growth has been moderate. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this."

Whether or not an August interest rate drop actually happens may come down largely to both the new global market conditions as regulators navigate Brexit developments, and the June quarter consumer price inflation (CPI) report which will be released on July 27.

What does it mean for your home loan?

During the month we’ve seen the lingering effect of the last RBA rate cut on home loan interest rates, with further cuts - particularly on fixed rate home loans - trickling through from lenders. So for any home buyers considering locking in a low rate, now may be a good time to make a move - unless you’re betting on another RBA rate cut in August.

Although already low home loan rates are looking even sweeter, and seem unlikely to rise again in the next month or two, it’s not time for borrowers to become complacent. Savvy Aussies should still keep one eye on the market and stay up-to-date on the best home loan deals.

• 1 year fixed rate: Illawarra Credit Union - 3.65% (comparison rate 4.10%)
• 2 year fixed rate: 3.74% -  Suncorp (comparison rate 4.45%), Newcastle Permanent (comparison rate 4.84%)
• 3 year fixed rate: loans.com.au - 3.67% (comparison rate 3.88%)
  
• 4 year fixed rate BCU - 3.80% (comparison rate 4.38%)
• 5 year fixed rate: 3.99% - Greater Bank (comparison rate 4.48%), Teachers Mutual Bank (comparison rate 4.77%), UniBank (comparison rate 4.77%)

Best variable rate home loan offers

*All home loan rates based on owner occupiers with an LVR of 80% or higher

Check out other great home loan offers on the market over at our home loan comparison table.

And what about your savings?

Although the RBA has opted to keep interest rates on hold for now, with experts predicting another cut on the horizon savers will need to be on the lookout for all the best deals in order to secure a decent return on their cash stash.

Luckily, Mozo are here to help, and we’ve rounded up some of the best high interest savings accounts to park your rainy day fund in.

Best savings accounts

For more great savings options, visit our saving accounts comparison table.