July RBA decision: Official cash rate untouched at 1.50%

As Benjamin Franklin once wrote, "...in this world nothing can be said to be certain, except death and taxes,” but the old idiom could well be in need of updating, with the RBA board yet again showing their consistency by maintaining interest rates at a record low 1.50%.

The decision handed down in Sydney this afternoon marks a twenty-first straight hold from the RBA, which now hasn’t made a change to the official cash rate since a rate cut back in August 2016.

In his monetary policy decision statement RBA Governor, Philip Lowe, highlighted strong GDP growth in the March quarter, positive employment growth and low levels of inflation as factors that contributed towards the board's decision to hold. 

"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," he said. 

RELATED: Why home loan rates are going up

According to Mozo Product Data Manager, Peter Marshall, the latest hold from the RBA comes as no surprise given the state of the key economic indicators, with little prospect of any move in either direction in the near future.

“If we do get more rate increases from the banks and the economy’s strength continues to be below expectations, there’s potential that the RBA could cut interest rates to counterbalance some of those out-of-cycle increases. But that seems less likely than a long period with no change eventually followed by some increases,” he said. 

Mortgage rates are on the move (and heading north)  

While the latest RBA decision is hardly likely to raise any eyebrows, it does further highlight the widening gap between the official cash rate and rising variable home loan rates. Figures from the Mozo database show that six lenders have recently hiked variable home loan rates, or have signalled that they plan to do so in the near future. 

According to Marshall, the rate increases are in part down to the increased funding pressure Australian banks are facing as a result of rising interest rates in Europe and the United States, as well as an unusually high Bank Bill Swap Rate at home.

But while interest rate rises will be an unwelcome hit to some household budgets, there could be a larger problem for mortgage holders.

“I think the biggest area of concern is not interest rates, but credit availability. The banks have been tightening their credit assessment procedures which makes it harder for people to get loans or refinance,” said Marshall.

“There are a growing number of people who will find that they’re not able to shift from one lender to another, as well as those on interest only loans who will find that they are denied a further interest only period.”

Best variable rate home loan offers

Best fixed rate home loan offers (3 year term)

Term deposits ticking up

While the outlook won’t look so rosy for some homeowners, the continued uptick in term deposit rates could be good news for Australians looking to make a return on their savings.     

Figures from the Mozo database reveal that term deposit rate increases heavily outweighed decreases in the month of June, with offers in the 1-3 year term deposit categories now at their highest points since late last year.

On the other hand savings account rates remain relatively unchanged, with an increase to Citi’s four month introductory rate to 3.05% and a sprinkling of rate reductions among the changes over the past month.   

Read on below for some of the best term deposit and savings account offers currently* in the Mozo database:

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

Best ongoing savings account offers

  • RAMS Saver Account - 3.00% (if you deposit a at least $200 and make no withdrawals each month)
  • UBank USaver with Ultra Transaction Account - 2.87% (if you deposit a minimum $200 into the account or a linked Ultra Transaction Account each month)
  • ME Online Savings Account - 2.85% (if you make a weekly tap and go purchase using your linked ME Everyday Transaction Account Debit MasterCard)
  • Australian Unity Active Saver - 2.80% (if you make a minimum deposit of at least $250 and no withdrawals every month)
  • Coastline Credit Union Bonus Reward Saver - 2.80% (if you make a minimum deposit of $20 and make no withdrawals within the month)
  • ING Savings Maximiser - 2.80% (if you deposit $1,000 or more each month from a linked Orange Everyday account as well as make at least five purchases on your credit or debit card)

RELATED: New financial year sparks home loan discounting frenzy

Interested in comparing more great offers? Mozo’s handy home loan, term deposit and savings account comparison tables could help you land a better deal today. 

*Rates accurate as of July 3, 2018.

Top home loans - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Awards for 2021.

    Go to site
    Details
  • placeholder
    Fixed Rate Loan with Orange Advantage

    Owner Occupiers, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.04% p.a.
    fixed 3 years
    3.60% p.a.

    Know exactly what your repayments will be, and you can fix your rate for up to 5 years. No monthly, annual fee or transaction fees.

    Go to site
    Details
  • placeholder
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.
    fixed 3 years
    2.24% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Variable Home Loan Special

    Owner Occupier, Principal & Interest, LVR <70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a. variable
    2.12% p.a.

    Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, 100% offset account. Enjoy a simple online application. Special rate applies to home loan applications submitted by 31st May 2021. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Go to site
    Details

*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, loan amount and term entered. 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 Loans Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.