Three in a row? Not today says RBA as rates stay at 1.00% in August

Hold! That was the verdict from the Reserve Bank (RBA) Board which took the decision to maintain the official cash rate at 1.00% at its August meeting in Sydney this afternoon. 

The move comes as a respite after two consecutive 0.25% rate cuts at the RBA’s June and July meetings and means that interest rates will remain at record low levels for at least another month. 

RELATED: Back to back cuts: The RBA drops official interest rates to 1.00%

Despite the hold, speculation remains rife that the RBA will be forced to drop the official cash rate for a third time in 2019 in the coming months. 

“Today’s move from the Board was not unexpected, especially given last week’s CPI figure of 1.60% which proved higher than expected. Next month may be a different matter though, as I think there’s a high chance of a cut in either September or October,” said Mozo Banking Expert, Peter Marshall. 

“The RBA is treading a fine line between cutting rates to support the economy and cutting rates and panicking people. There are also only a couple of shots left in the rate cut chamber - that’s why they want to be seen as being measured about what they’re doing and not rushing unless there’s a very good reason to rush.”

Cuts trickle down to borrowers as home loan rates dive below 3.00%

Now that we have a chance to breathe following today’s rate hold, what’s actually happened to home loan rates since the RBA made their last cut on July 2? 

Perhaps unsurprisingly, fewer home loan lenders passed on the full 0.25% RBA cut this time around. As a result, only eight providers in the Mozo database passed on the full 0.50% cut to their variable rate customers over the two months. 

The recent cuts do mean that variable rate borrowers can now take advantage of interest rates as low as 3.00% and below. Here are some of the lowest variable rate offers currently^ in the Mozo database.

Variable rate home loans (owner occupiers making principal and interest repayments)

LenderHome LoanInterest Rate
Reduce Home LoansLow Rider2.89% (2.91% comparison rate*)
Well Home LoansWell Balanced2.97% (2.99% comparison rate*)
HomestarVariable Rate Loan2.99% (3.02% comparison rate*)
loans.com.auSmart Home Loan3.03% (3.05% comparison rate*)
FreedomlendVariable Home Loan3.04% (3.04% comparison rate*)

Some of the major action has come in the fixed rate home loan market though, with 0.50% reductions to the top rates on offer for one and five year terms in the Mozo database proving the highlights among a number of fixed rate changes. 

Similarly to variable rates, recent changes mean borrowers can now take advantage of fixed rates offers below 3.00% for a number of terms. 

According to Marshall, the recent fixed home loan rate cut action could be a signal of the rate environment we’re entering. 

“With rates dropping sharply and flattening out across fixed rate terms for home loans, it shows that lenders don’t think things are going to change anytime soon. Rates could well be  depressed for an extended period to come,” he said. 

Check out some of the lowest fixed rate offers currently^ in the Mozo database.

Fixed rate home loans (owner occupiers making principal and interest repayments)

LenderTermHome LoanInterest Rate
Greater Bank1 YearGreat Rate Home Loan2.79% (3.95% comparison rate*)
Mortgage House2 YearAdvantage Home Loan Special2.96% (3.33% comparison rate*)
Mortgage House3 YearAdvantage Home Loan Special2.96% (3.31% comparison rate*)
Greater Bank4 YearGreat Rate Home Loan3.39% (3.84% comparison rate*)
UBank5 YearUHomeLoan (Fixed)3.19% (3.44% comparison rate*)

Ready to compare the latest rates across a range of banking products? Head over to the Mozo home loan, savings account or term deposit comparison tables for an even bigger range of offers. 

Compare home loans - last updated February 27, 2021

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

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

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

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  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR 70-80%

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    2.09% p.a.
    fixed 2 years
    2.56% p.a.

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  • Mozo Experts Choice 2020
    UHomeLoan - Discount Offer

    Owner Occupier, Principal & Interest

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    Initial monthly repayment
    2.34% p.a. variable
    2.34% p.a.

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  • Mozo Experts Choice 2020
    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 online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

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  • Special Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.
    fixed 4 years
    3.45% p.a.

    Ability to split your loan between fixed and variable. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Limited time offer extended, T&Cs apply

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^As of 6 August, 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 the amount and term you entered.

^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.

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