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

By Tom Watson · · 5 min read
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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. 

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 8 September 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

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    • Owner Occupier
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    Interest rate
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    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
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    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 online in minutes.

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    • Owner Occupier
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    Interest rate
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    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
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    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get 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.

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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.

* 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.

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.