RBA Cash Rate

Your destination for RBA news, expert forecasts and more

cut

1.75%

Cash rate cut

to 1.75% on Tuesday 3rd May 2016

The Reserve Bank of Australia (RBA) sets the official cash rate target on the first Tuesday of every month except January. Below are expert forecasts from the finder.com.au Reserve Bank Survey of some of Australia's brightest minds in economics and property. You can also read more about the RBA and get general advice about what to do in the event of a rate cut, hold or rise decision.

55% of experts in our survey believe that interest rates will fall in 2016.

IMPORTANT: See how your lender has responded to the May 2016 rate cut

96%of our resident rate experts

incorrectly forecast the rate would be held at 2.00% on Tuesday 3rd May 2016

View forecasts →

  • Announcements

    Announcements

    Read about the latest RBA announcements and find out if it's time to carry out a fresh comparison of your financial products to get the best deal.

  • FAQs

    RBA Cash Rate Explained

    The RBA meets on the first Tuesday of each month to decide on the official cash rate target - the rate offered on overnight loans to commercial banks. They can decide to keep the rate the same, raise it, or decrease it.

    Find out how this rate can affect the interest rate you're charged/receive on a loan, credit card or savings account.

  • RBA Forecasts

    RBA Forecasts

    The finder.com.au Reserve Bank Survey is a monthly survey which asks some of Australia's most authoritative financial experts what they think the RBA will decide to do each month.

    Make an informed decision when deciding to fix interest rates or lock your money into a term deposit by seeing what these experts think will happen.

What has the RBA said?

Find out what the Reserve Bank and Governor of the RBA Glenn Stevens has said about the official cash rate.

What do you think the RBA will do with the Cash Rate in June 2016?




"Based on the available data and the forecasts, the Board decided that leaving the cash rate unchanged at this meeting was appropriate. Members judged that the outlook for inflation may afford some scope for a further easing of monetary policy should that be appropriate to lend support to demand. The Board would continue to assess the outlook, and hence whether the current stance of policy would most effectively foster sustainable growth and inflation consistent with the target."
- Statement extracted from Reserve Bank of Australia 1/12/15

Our resident rate experts

+ Open all commentary

Find out what each of our experts predicts for next month and their detailed forecast explanations

Melissa Browne

Forecast: Up beyond 2016
+ Read Melissa's full forecast

April

No change

May

No change

I don't believe there's a case to cut rates at present and certainly no reason to move them upwards.

Garry Shilson Josling

Forecast: Up beyond 2016
+ Read Garry's full forecast

April

No change

May

No change

Nothing much has changed since last month, when the cash rate wasn't moved.


Shane Oliver

Forecast: Up beyond 2016
+ Read Shane's full forecast

April

No change

May

No change

While the RBA retains an easing bias, since the last meeting there has been a further settling in global risks and unemployment has fallen further so it’s hard to see the RBA cutting in May.

Steven Pambris

Forecast: Up in August, 2016
+ Read Steven's full forecast

April

No change

May

No change

Any move by RBA to move rates with the budget around the corner which will outline the Government's Fiscal Policy going forward will reflect lack prudence.


Savanth Sebastian

Forecast: N/A
+ Read Savanth's full forecast

April

No change

May

Cut

While we don’t think there is a screaming need for interest rates to be cut on economic activity grounds, the low inflation result opens the door for the Reserve Bank to cut rates if they deem it is necessary. When it comes to inflation central banks across that globe are facing the same concerns. The bottom line is that underlying inflation is undershooting the 2-3 per cent target band and that suggests little risk in cutting rates a little further.


Andrew Wilson

Forecast: Down in August, 2016
+ Read Andrew's full forecast

April

No change

May

No change

Better jobless data is offsetting rising negatives.


Paul Ryan Eccho Me

Paul Ryan

Forecast: N/A
+ Read Paul's full forecast

April

N/A

May

No change

I don't see any reason why the Reserve Bank will vary the position they have held over the past 12 months. I think there would be a level of concern about lenders moving rates outside their own decision so it might be best to keep the cash rate as is.


Scott Morgan

Forecast: Down in August, 2016
+ Read Scott's full forecast

April

No change

May

No change

The recent employment data reinforces my view that the economy is not performing that badly. There are no obvious economic drivers for a rate change at the moment. The RBA will wait for more definitive evidence either way before making a change. Although, other factors remain at play such as the upcoming election, the actions of overseas central banks and worries about the $A. Business and consumer confidence is key.


Mark Brimble

Forecast: Down in August, 2016
+ Read Mark's full forecast

April

No change

May

No change

Stronger commodity, US and currency markets will hold the RBA off this month. Bias still to the negative.


Shane Garrett

Forecast: N/A
+ Read Shane's full forecast

April

No change

May

No change

The balance between inflation, growth and exchange rate conditions does not warrant an immediate interest rate reduction.


Paul Bloxham

Forecast: N/A
+ Read Paul's full forecast

April

No change

May

No change

Economic activity is holding up well and the Budget is due that day.


Michael Witts

Forecast: Up beyond 2016
+ Read Michael's full forecast

April

No change

May

No change

While the RBA would like to see the AUD lower, we believe they will wait until the impact of the Budget is defined prior to considering adjusting the cash rate.

James Boyle

Forecast: Down in November, 2016
+ Read James's full forecast

April

No change

May

No change

Numerous reports show jobs growth beat expectations in April and that the unemployment rate will hover just under the six per cent mark for some time. So, even though inflation is low, there is no real reason for Mr. Stevens and the Board to cut rates quite yet. However, the biggest concern for the RBA could be the rising dollar – currently around 77 cents against the US – which could have an effect on the adjustment already underway in the economy. Additionally, with a forced election taking place earlier than expected in Australia, and the US election really ramping up – this could also see both economies slow a little as market players hold off making big decisions until they know the outcome. All this might suggest a rate cut is due at some point towards the end of the year, but we’ll just have to wait and see exactly when one is needed.


Grant Harrod

Forecast: N/A
+ Read Grant's full forecast

April

No change

May

No change

There's been no major economic changes since last month. Property price growth continues to slowly moderate in Sydney and Melbourne and a number of banks have lifted mortgage rates over the past month; both these factors negates any concerns the RBA has surrounding real estate markets.


Stephen Koukoulas

Forecast: Up in December, 2016
+ Read Stephen's full forecast

April

N/A

May

No change

The economy is growing at a decent pace, the unemployment rate is falling and there appears to be the early stages of an upswing in commodity prices. The economy does not need an interest rate cut and with inflation low, there is no need for a hike. All of which means ‘on hold’.


Mark Crosby

Forecast: Up in November, 2016
+ Read Mark's full forecast

April

No change

May

No change

The global environment is stable, and with the FED signalling a stable rate environment there there is little reason for the RBA to move in either direction.


Emily Dabbs

Forecast: Up beyond 2016
+ Read Emily's full forecast

April

No change

May

No change

Australia's economy continues its transition towards non-mining driven growth. While the rise in the Aussie dollar is a concern for export growth, it is likely to depreciate in coming months which will take pressure off the central bank to ease policy further.


Lisa Montgomery

Forecast: Down in September, 2016
+ Read Lisa's full forecast

April

No change

May

No change

There is plenty for the RBA to consider as it approaches this meeting, including a steadily rising Australian Dollar, the May budget and looming Federal election. The decision, however, will be to leave the cash rate on hold.

Jessica Darnbrough

Forecast: Down in July 2016
+ Read Jessica's full forecast

April

No change

May

No Change

The Reserve Bank will probably look to leave the official cash rate untouched in May as they wait to see what impact the Federal Budget will have on consumer confidence. Depending on the outcome of the Budget, we may see the Reserve Bank push rates down at least once more this year.

Ken Sayer

Forecast: N/A
+ Read Ken's full forecast

April

No change

May

No change

There is no compelling reason [for a rate change], unemployment & inflation are both in check.


Alan Oster

Forecast: Up beyond 2016
+ Read Alan's full forecast

April

No change

May

No change

Still looking to see the effects of global instability. Local growth so far is strong.


Matthew Peter

Forecast: Down in September, 2016
+ Read Matthew's full forecast

April

No change

May

No change

Robust labour market, strong GDP growth in December, recovery in key non-mining sectors will mean that the RBA will keep their powder dry for another month.


Noel Whittaker

Forecast: Down in June, 2016.
+ Read Noel's full forecast

April

Cut

May

No change

Budget day.


Angus Raine

Forecast: Up beyond 2016
+ Read Angus' full forecast

April

No change

May

No change

RBA Governor Glenn Stevens has indicated no rate cut is imminent, as keeps an eye on employment trends and the American and global banking situation.


Saul Eslake

Forecast: Up beyond 2016
+ Read Saul's full forecast

April

No change

May

No change

No need to cut rates - unemployment is still trending down gradually, economic growth is only a little below trend.


Janu Chan

Forecast: Up beyond 2016
+ Read Janu's full forecast

April

No change

May

No change

While the RBA has expressed some concern regarding the global economy and the recent appreciation of the Australian dollar, it remains satisfied that rebalancing in the economy is occurring and that the labour market is improving.


Nicki Hutley

Forecast: Up beyond 2016
+ Read Nicki's full forecast

April

No change

May

No change

Economic indicators, especially labour market indicate reasonable momentum in the Australian economy (although prolonged A$ strength could erode this).


Bill Evans

Forecast: Down in June, 2016
+ Read Bill's full forecast

April

No change

May

No change

N/A

Other experts on the panel

Warren Hogan

April

N/A

May

N/A

The Reserve Bank has said that they aren't going to be doing anything with the cash rate. They are sitting on their hands. I don't think they will do anything for six months, however things can change.

Peter Munckton

April

N/A

May

N/A

They are comfortable with the current level of interest rates.


Scott Pape

April

N/A

May

N/A

The Reserve Bank has said that they aren't going to be doing anything with the cash rate. They are sitting on their hands. I don't think they will do anything for six months, however things can change.


David Bassanese

April

N/A

May

N/A

We’re experiencing a steady unemployment rate, which will contribute to the decision to hold the cash rate.

Richard Robinson

April

No change

May

N/A

Economy still growing OK. No need to panic...yet


Chris Caton

April

N/A

May

N/A

No reason to do anything else.


Michael Blythe

April

No change

May

N/A

Economy not in need of any further assistance at this stage.


James Bond

April

N/A

May

N/A

The RBA rarely makes one move in isolation, running a campaign of several cuts or rises. This time will be no different. The weak labour force data for January has only added more to the case for a cut.


Paul Williams

April

No change

May

N/A

The RBA are happy to continue to monitor market conditions and keep monetary policy generally accommodative.


Jason Spencer

April

N/A

May

N/A

Credit growth is growing at a moderate pace while the dollar remains around the reasonable 70c mark.


Peter Jones

April

N/A

May

N/A

​There is sufficient stimulus.

James McIntyre

James McIntyre

April

N/A

May

N/A

The Reserve Bank Board will have no new, substantive information on the economy compared to their March meeting, where the decision was taken to remain on hold.

Concerns about financial stability are likely to keep the Reserve Bank sidelined… However, if the currency remains elevated, or pushes beyond US$0.78, we think there is a substantive risk the Reserve Bank cuts in May.


John Caelli

April

No change

May

N/A

The RBA will keep rates on hold due to strong growth data and employment numbers. The only concern is the strength of the Australian dollar. The RBA will keep the powder dry to help protect against any global market shocks.


Paul Clitheroe

April

N/A

May

N/A

It’s a curate’s egg. The economy is not all bad… Global volatility makes predicting a dangerous sport.


Chris Schade

April

No change

May

N/A

Whilst it remains more likely the Reserve Bank will cut as oppose to raise rates in 2016, conditions in the domestic economy do not currently warrant such. That said, the Board will be closely watching economic developments over the coming period and remains ready to act if required.


Peter Boehm

April

No change

May

N/A

No compelling reason to move rates just yet - I think by the middle of the year we'll have a better line of sight of possible rate movements.


Zoe Pointon

April

N/A

May

N/A

Uncertainty in the equity markets and slowing property price growth.


Linda Janice Phillips

April

N/A

May

N/A

​The Reserve Bank must be comfortable with the exchange rate around US$0.71. House price rises in Sydney are slowing, which will be regarded as welcome, but growth is accelerating in Melbourne. While the global outlook is uncertain, it is expected that the Fed will soon start increasing US rates, which will limit the capacity for the Reserve Bank to move on the downside. Some domestic indicators such as unemployment are improving, and the Reserve Bank is reporting a somewhat better outlook. While the markets would like to see rates fall 25bp to offset the mortgage price hikes by the banks last month, on the whole it is likely that the Reserve Bank will be comfortable in waiting until February before making any decision to change rates… The level of volatility in global markets, problems of debt management in developing countries, the threat of expansion of the wars against IS, and uncertainty within the Euro-zone, the latest concern being Portugal, have the potential to upset the base case outlook of a slow but steady improvement in the economy. The risk of "black swan events" is rising, and volatility is likely to remain high.


Jonathan Chancellor

April

No change

May

N/A

We are very close to the likely next move downwards, but it will still me a wait and see approach from the board.


Nathan McMullen

April

No change

May

N/A

Reasonable prospects for continued growth in the economy remain and thus no compelling immediate case to ease rates.


Angelo Malizis

April

N/A

May

N/A

No economic reason to move at this stage.


David Scutt

April

N/A

May

N/A

It still remains a matter of when, not if, the Reserve Bank will ease policy further. Outside of established residential and commercial property, primarily on the east coast, the domestic economy requires further stimulus. It'll be a line-ball decision as to whether or not they ease but history, along with recent auction clearance rates in Sydney, may see them hold off until May. Either way I expect a cut in one of the next two meetings along with a continuation of their easing bias.”


Gavin Smith

April

N/A

May

N/A

Comments from RBA Governor, Glenn Stevens indicated that the cash rate would remain at current levels for an extended period of time.


Peter Switzer

April

N/A

May

N/A

A rate cut is what they should do but I would not be surprised if they hold. There is a too cautious approach at the Reserve Bank which is holding back growth

Neville Norman

Neville Norman

April

N/A

May

N/A

The market is currently a ‘catch 22'… There has been a high level of unsatisfied young house buyers at continued absurdly low interest rates.


Scott Haslem

April

No change

May

N/A

N/A


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How the cash rate will impact on your finances

See how the cash rate changes can affect your savings, term deposits, home loans and what you can do about it.

If the rate rises

Find an account which offers the same features and fees but with a better rate.

If the rate gets cut

Consider comparing a competitive term deposit rate so your interest earnings don't suffer.

If the rate holds

Carry out a quick comparison to make sure you're getting the best return on your money, see what promotions banks are offering.

Compare savings accounts

Compare term deposit accounts

If the rate rises

Ask your lender for a rate discount so that if rates do rise you won't be worse off, or alternatively, compare other variable or even fixed rate home loans to find a better deal.

If the rate gets cut

See how your lender responds to the cut. If they don't pass on the full rate cut, ask for a rate discount, and if you're still not happy start comparing what other deals are in the market. Some lenders have been known to pass on more than the official rate cut after an RBA announcement!

If the rate holds

Compare other variable rate home loans to make sure you're still getting the best deal. If rates are tipped to rise in the near future you may also want to compare fixed rates.

Compare variable rate home loans

Compare fixed rate home loans

If the rate rises

Your rate won't rise as you locked it in, so you can relax a little. If your fixed rate is soon to end, start comparing what deals are being offered so you don't find yourself scrambling to lock in another rate.

If the rate gets cut

If you feel your home loan is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs. If this figure is reasonable, you might want to consider comparing variable home loans. Use our switching costs calculator to see if you'd save.

If the rate holds

Because your rate is fixed for an agreed period of time, a decision by the RBA to hold won't have as much of an effect on you depending on how long you still have to go in your fixed term. As mentioned above, you might still want to monitor the other deals in the market to keep informed.

Compare fixed rate home loans

Compare variable rate home loans

If the rate rises

If rates rise, savings accounts rates could be increased as well. If this happens, you might want to compare the rates of high interest savings accounts. Remember that most term deposits have interest penalties if you withdraw your funds early, so keep this in mind.

If the rate gets cut

Your rate won't change because it's locked in, but if you're nearing the end of your term start comparing both high interest savings accounts and term deposits to find a good deal.

If the rate holds

Compare accounts and ensure you're aware of what's being offered in the market.

Compare savings accounts

Compare term deposit accounts

History of the Reserve Bank of Australia official Cash Rate

The graph above shows the movement in the official cash rate target. A lower cash rate reduces the cost of borrowing money so more people are encouraged to borrow - stimulating the economy. Higher interest rates tends to subsequently encourage spending. This is how a rise or fall in rates affects the level of supply and demand and therefore the level of inflation - which the RBA wants to keep in the target range of 2%-3%.

Embed this interactive graph on your website by copying and pasting the code below into your HTML and it will be automatically updated every month.

How does Australia compare with the rest of the world?

The Reserve Bank is only one of many central banks around the world. Each country’s central bank has its own challenges in balancing growth, inflation and monetary policy. The chart below shows how Australia’s cash rate compares to those of some of the other big economies around the world.

What is the Reserve Bank of Australia and what is the cash rate target?

The Reserve Bank of Australia (RBA) is the government body that implements monetary policy by setting the Australian cash rate, announced on the first Tuesday of the month. Although the Reserve Bank is government-funded, it is independent of party politics, and has free rein to make its rates decisions without any political influence. The official cash rate is watched by many people, but none more closely than the nation's top economists.

When the RBA decides the appropriate cash rate, its primary aim is to keep inflation to a stable level of two to three per cent. When inflation is moderated in this way, it keeps the value of the Australian dollar stable and supports long-term growth in the economy, with a view to keeping a high employment rate. The RBA announcement of the cash rate each month is watched closely by the media and home-owners because it is one of the key factors that determine the interest rates set by banks for their home loans. While banks' lending rates have historically risen and fallen in line with changes in the RBA's cash rate announcement, in recent years the banks have been criticised for not following the RBA's lead.

The interest charged by banks can have a huge impact on the bottom line of a household budget because of the size of their mortgage repayments, so it's useful to understand how the banks decide on the rate that they set.

The interest payment charged by the bank is made up of the cash rate, a risk premium for individual borrowers and a profit margin. In addition to this, there has been an extra factor charged since the global financial crisis because of the reduction in readily accessible cash. The classic supply-demand conundrum has driven up the cost of global inter-bank lending – meaning there is less supply of cash so it has become more expensive – so banks are passing on this cost to consumers by charging higher interest rates.

It's important for home owners to keep an eye on their lender and know they have the power to vote with their feet: if they're not happy with the rates their banks set each month after the RBA cash rate announcement, they should do their research and consider shifting to a new lender.


Reserve Bank monthly announcements

RBA Cash Rate Target Announcement May 2016

The RBA decided to cut the cash rate by 25 basis points to 1.75% from 2.00%.

Read the full story about the rate cut here.

RBA Cash Rate Target Announcement April 2016

Reserve Bank holds cash rate, experts maintain negative gearing changes could boost affordability.

5 April, 2016: The majority of the resident rate experts from the finder.com.au Reserve Bank Survey accurately tipped that the Reserve Bank would hold the cash rate today, and many predict that the abolishment of negative gearing could be good news for first home buyers.

A total of 97%, or 34 out of 35, leading economists and experts expected no change to the cash rate at today’s Board meeting, which marks the 10th consecutive month that the Bank has maintained the cash rate, (the last time the Bank slashed the rate was in May 2015).

60% of experts predicted no movement for the remainder of 2016, and the majority of this group (20 experts) forecast a rate rise, but not until next year.

Why hold the cash rate?

Many of the resident rate experts claimed that while the Reserve Bank will keep a sharp eye on the elevated level of the Australian Dollar (AUD), it will need to see whether the recent rise in the currency will be sustained before it adjusts the cash rate accordingly.

With inflation sitting within its target band of 2-3%, growth returning to the economy, and consumer sentiment hovering at average levels, the Bank is satisfied with the existing monetary policy settings. As a result, the Bank judged that a cash rate movement was not required at today’s Board meeting.

Despite today’s decision, the experts and economists cited volatility in global markets, upcoming elections, the lift in the AUD, and a major shift in unemployment as drivers that may prompt the Reserve Bank to take a different outlook regarding cash rate movements in the months to come.

What’s on the cards for future cash rate movements?

If the Australian dollar continues to appreciate, the Reserve Bank may feel prompted to adjust monetary policy by initiating a cash rate cut.

The respondents from the finder.com.au survey predicted a movement in May, June and July this year, with 20% of resident rate experts predicting a fall in the cash rate at some point during these months.

Of the respondents who believed that the cash rate would drop this cycle, 52% (16) said it would drop no lower that its current value. Interestingly, 29% (9) expected a low of 1.75% and 19% (6) believe it may dip to 1.5% or lower.

What does this mean for the home loan market?

With interest rates at historic lows, fewer Australians are taking out interest-only home loans as mortgage repayments become more affordable.

Data from the Australian Bureau of Statistics (ABS) and the Australian Prudential Regulatory Authority (APRA) analysed by finder.com.au shows that the market share of interest-only home loans fell from 45.8% to 37% from June 2015 to December 2015.

Additionally, the value of new interest-only loans approved in Australia plummeted from $44 billion in June to $36 billion in December 2015 as borrowers take advantage of low-interest rates.

Negative gearing and housing affordability

While the Reserve Bank has talked about reviewing negative gearing for some time, it remains a contentious issue. Labor has proposed to “grandfather” existing arrangements but future investors can only negatively gear new housing. The capital gains discount will be halved from 50% to 25%. The Coalition government has not announced its stance on negative gearing changes, while the Greens Party have proposed to remove the capital gains discount altogether.

As negative gearing can potentially push up asset prices, the removal of negative gearing could make it easier for first home buyers and low-income earners to break into the property market. This is because there will be greater available housing than buyers, and house prices will begin to fall. It may also mean that bidding on existing properties will be less intense for first home buyers.

Interestingly, some existing investors may sell when leases are due for renewal which may mean there are more tenants seeking housing opportunities than there is supply, so rents may rise.

In the finder.com.au Reserve Bank Survey, economists were asked to consider how abolishing negative gearing would affect housing affordability in the future.

A total of 65% experts believed that eliminating negative gearing on existing properties could result in a drop in property prices, which may prompt a market contraction. Of these, predicted a drop of over 5% if the Labor government restricts negative gearing from July 2017.

The average loan size for first-time buyers has fallen from $355,500 in October 2015 to $338,800 in January. Thus, falling property prices coupled with low-interest rates could make the property market more accessible for first home buyers.

RBA Cash Rate Target Announcement March 2016

RBA holds official rate for ninth time in a row

1 March, 2016: Although 97% (30/31) of our resident rate experts accurately tipped that the rate would be held at 2.0% at today’s Board meeting, the majority are predicting "out of cycle" rate changes to happen over the course of 2016.

When asked about "out of cycle" interest rate changes this year, 39% (2/5) economists in the finder.com.au Reserve Bank survey predict an "out of cycle" interest rate change will take place while the majority of economists predict the Reserve Bank will keep the cash rate on hold, or lower it at some point in 2016.

45% (14/31) of experts believe we are at the bottom of the cycle, while one in four experts are forecasting a further rate cut by 25 basis points to 1.75%. Three economists predict the cash rate will drop as low as 1.50% this cycle.

On the other hand, 23% (7/31) believe a rate rise is due in 2016, while a further 48% agree that there will be a rise, but not until next year.

While three lenders -- Yellow Brick Road, Bankwest and Australian Unity – have upped their variable rates this month while the cash rate paused, 39% of survey participants expect lenders to follow suit and shift interest rates "out of cycle" this year, which means predicting changes will be harder..

Why hold the cash rate?

With accommodative conditions, the Reserve Bank has showcased its "wait and see" mindset by maintaining the cash rate today, following a previous hold from last month’s decision.

Although the economy is growing at a below-trend pace, low unemployment and inflation levels remain within target. Thus, the Reserve Bank decided to hold the cash rate at 2.0% for March 2016.

While global turmoil of financial markets represents a potential risk, the Reserve Bank will wait for further economic data to be released before making a call.

A low AUD and a strong labour market have contributed to the Reserve Bank’s decision to hold the cash rate for March 2016.

How can I prepare for ‘out of cycle’ rate changes?

With uncertainty in the market, it’s important that you don’t become complacent about your mortgage. You should investigate the best deals on the market and see how your lender fares. If you don’t believe your mortgage is meeting your needs, speak to your lender and ask whether they can offer you a better rate or lower fees-- use your loyalty and repayment history as leverage.

Stay abreast with market trends and keep an eye out for any information that may signal ‘out of cycle’ rate changes that may be initiated by your lender.

How to better manage your mortgage:

  • Refinance. Before you refinance, make sure you’ve done some groundwork. Compare different home loan deals available on the market and if you discover that you’re no longer getting a competitive deal, or if you think you’re home loan no longer satisfies your needs, then chat to your lender and negotiate for a better rate. Use your loyalty, repayment history and loan size to up your negotiating power. However, if it’s more than a lower rate that you’re after, and you’d like to refinance to a new lender, make sure you carefully compare the costs involved.
  • Extra repayments. If your home loan enables you to make additional repayments without penalty, then you should use this feature to your advantage. Making regular extra repayments can help you pay down your mortgage sooner. Use our extra repayment calculator to see how much you could save over the lifetime of your loan.
  • Offset account. Use a linked offset account to minimise the interest payable on your home loan by the amount held in the account. This can also help you shrink your interest payable and your loan term.
  • Split loan or fix. If you’re concerned that your lender may unexpectedly hike rates, then think about splitting your loan into variable and fixed portions or fixing your rate. This will give you peace of mind in knowing what your repayments will be from month to month.
  • Disciplined saving. To protect yourself from ‘out of cycle’ rate changes, build up a buffer of savings as this could help you cope with a sudden rate increase. Take out a high-interest savings account and make regular deposits into it. Stay focused and don’t be tempted to dip into your savings.

RBA Cash Rate Target Announcement February 2016

Reserve Bank holds cash rate at 2.0%

2 February 2016: All 29 resident rate experts from the finder.com.au Reserve Bank survey accurately predicted that the Reserve Bank would maintain the cash rate at today’s Board meeting.

The survey respondents cited improved labour market conditions, modest inflation and low unemployment as the driving factors that prompted the Reserve Bank’s call to hold the cash rate this month and to continue its holding trend (the Bank has held the cash rate at 2.0% since May 2015).

Despite today’s decision, the resident rate experts don’t believe that the cash rate will be held for much longer; 34% of the survey respondents expect a rate rise in 2016, while 52% of the resident rate experts believe that a rate rise will take place later in 2017.

56% of some of the nation’s most influential experts believe that the Reserve Bank is unlikely to cut rates any further this year.

Why did the Reserve Bank hold the cash rate?

With strong consumer confidence, a depreciating Australian dollar and low unemployment, the Reserve Bank judged that there was no need to change the monetary policy setting this month.

Stronger employment conditions and a modest inflation rate of 1.5% have contributed to a stimulus in the Australian economy and thus a cash rate reduction was not required for February 2016.

Many of the respondents from the finder.com.au Reserve Bank survey maintained that the Reserve Bank is comfortable with the current level of interest rates, and remains positive about the current and future economic outlook including the Australian dollar’s exchange rate.

The resident rate experts believe that there is too much uncertainty about global growth to raise rates just yet.

Fixed rate home loans on the rise

With record low interest rates, there’s no wonder why many Australians are opting for a fixed rate mortgage. finder's consumer advocate Bessie Hassan says that the popularity of fixed rate home loans is on the rise as many borrowers seek to take advantage of the security and certainty of a fixed rate.

“Over the past year the cash rate has fallen twice – in February and May 2015 – and finding better home loan rates has become a priority for many Australians.

“For instance, interest in three-year fixed rates on finder.com.au has almost doubled (80 percent) over the past three months compared to the same period the year before, while the popularity of two-year fixed loans has swelled by a staggering 95 percent.

“Interest rates in Australia are at historically low levels and the feeling is they are not going to get much lower. Borrowers are likely worried the pendulum will suddenly swing back and interest rates will start to rise”, she says.

Beware of hefty break fees

Many borrowers fix their home loan rate to benefit from the certainty of knowing what their repayments will be both now and into the future. However, if you’re considering fixing your interest rate you should be cautious of the hefty break fees that you may incur when exiting your mortgage early.

“Breaking a home loan during a fixed interest period can be hugely expensive, which is why homeowners should always do their research. For example, on a three year fixed rate of 4.59 percent, a break cost one year into the loan could set you back about $3,000, or on a $500,000 mortgage could exceed $5,000. Breaking a loan one year into a five year fixed deal, with an average rate of 4.92 percent, could cost you $10,000.

If you’re thinking of refinancing, you need to make sure that the potential savings of a lower interest rate or more useful features of a new home loan will outweigh any discharge or break fees charged by your existing lender.

Use our switching cost calculator to help you decide whether refinancing makes financial sense for you.

RBA Cash Rate Target Announcement December 2015

Reserve Bank maintains cash rate at 2.0%

All 33 resident rate experts and economists from the finder.com.au Reserve Bank Survey correctly predicted that there would be no cash rate change at the Board meeting today (December 1, 2015).

As the Reserve Bank held the cash rate at 2.0% for December 2015, the panel cited improved labour market conditions and modest inflation as the motivating factors behind the Reserve Bank’s decision to hold the cash rate.

Despite today’s decision, many of the resident rate experts believe that a cash rate drop is on the cards next year, with 15% of experts predicting that this will occur as soon as February 2016.

Experts were divided when it came to the future fluctuation of house prices; while nearly 58% of the resident rate experts are predicting domestic property prices to rise in 2016, 29% of the survey participants believe that property values will fall next year.

Why hold the cash rate?

With robust business conditions and consumer sentiment reaching its highest level since January 2014, the Reserve Bank had no urgency to alter the monetary policy setting this month.

Strong employment data and modest inflation (currently sitting at 1.5%) have contributed to a sufficient stimulus within the economy and thus a cash rate cut was not required to close out 2015.

Many of the resident rate experts in the finder.com.au Reserve Bank survey maintained that the Reserve Bank is optimistic about the current business and economic outlook, including the Australian dollar’s exchange rate and the housing market, and thus the Reserve Bank could not warrant another rate cut.

Are rate hikes on the horizon?

Despite recent fluctuations in the home loan market, including the out-of-cycle rate hikes charged on variable rate mortgages, our Consumer Advocate Bessie Hassan says that an official cash rate rise is unlikely to occur in the near future.
“While recent out of cycle rate hikes by 13 lenders came into effect last week (20 November, 2015), the official cash rate is expected to stay put for the time being, with almost three in five experts surveyed (58%) believing the cash rate will not rise for at least the next 12 months.
“These recent rate increases will, however, put a dampener on Christmas shopping according to one in four (26%) of the experts surveyed, who say the busiest spending season of the year will be affected by the rate hikes”, she says.

What’s in store for the property market?

Interestingly, the survey participants are divided about future prospects for the Australian property market and movement of house values with 38% predicting a decrease in demand for residential property in the next 12 months leading to 2016.
Nearly 45% of experts are also expecting rents to rise next year, while 42% say rents will remain the same and 13% claiming that the rental market could lose steam with rents to fall.
“This indicates that, regardless of demand, property prices as well as rent are expected to rise in value in 2016, which is great news for property owners but less so for those looking to break into the ever-competitive market”, Ms Hassan says.

How can I cope with rising property values and rents?

In light of property price appreciation and rental increases, it’s important that you practice due diligence to compare different home loans on the market, scout for a competitive rate, manage a buffer of funds, and apply for pre-approval to improve your chance of entering the property market.
Take control this festive season and reconsider your current mortgage.
“With work winding down, Christmas just a few weeks away, and recent rate hikes coming into effect, now is the perfect time to pull out your paperwork and find out whether your mortgage is actually serving your needs anymore. Check your current interest rate, the features of your loan, and jump online to compare what other similar products are out there – chances are you may just find a better deal.

“It’s not uncommon for banks to discount within the vicinity of 1-1.25 percentage points off their standard variable rate for new loans, and generally, the larger your mortgage the greater your bargaining power.

“If you can’t or would prefer not to switch lenders, you’ll need to demand a better offer from your current lender – speak to the customer retention department of your bank and tell them you’re not happy with your current deal. If they want to keep you, they’ll have to do better”, Ms Hassan says.

RBA Cash Rate Target Announcement November 2015

Reserve Bank holds cash rate at 2.0%

Results from the finder.com.au Reserve Bank Survey showed that 80% (24/30) resident rate experts correctly anticipated no cash rate movement for Melbourne Cup day, as evidenced by the outcome of today’s Board meeting.

Experts argued that an immediate cash rate cut to offset Westpac and other lenders’ decision to increase variable mortgages rates was unlikely and thus the Reserve Bank judged that holding the cash rate for November 2015 was the appropriate course of action this month.

Results from the survey found that nearly 30% of leading economists are predicting a cash rate fall by the end of the year. Of these, nearly 20% believed that the cash rate would fall at today’s Board meeting, while 10% believed a cash rate cut would occur in December this year.

However, survey participants were divided about how low the cash rate would fall- 55% of experts don’t believe it will fall below 2.0%, while 28% predict the cash rate will fall to 1.75%, and 17% expect the cash rate to dip to 1.5% this cycle.

Although all of the Big Four have lifted their variable rates for owner occupiers in recent weeks, many of the resident rate experts don’t believe the Reserve Bank will follow suit just yet. That is, more than 50% of experts said the cash rate will not increase until beyond 2016, while nearly 25% believe a rate rise will take place in the final quarter of 2016.

Why hold the cash rate?

Many of the resident rate experts in the finder.com.au Reserve Bank Survey argued that the Reserve Bank is optimistic about labour market conditions, and thus a rate move would be premature at this point in time as the new fiscal outlook is yet to be assessed.

The Melbourne Cup period is traditionally a time where the Reserve Bank makes a move with cash rates, and coupled with the out-of-cycle rate hikes by many of Australia’s major lenders, many believed that the Reserve Bank would cut rates this month to soften the blow of higher rates for owner-occupiers. However, the fact that lenders moved independently could be an indication that they believed rates would be maintained.

As the property market softens and the Australian dollar remains low, many believe that the Reserve Bank is satisfied with the status quo and will not initiate a rate movement until economic data is further reviewed.

Additionally, the Reserve Bank would not want to further fuel house prices through a rate reduction, particularly as the Sydney and Melbourne markets are beginning to cool.

Are more independent rate hikes on the horizon?

71% of resident rate experts predict more out of cycle rate changes to be announced in the months to come. Our money expert, Michelle Hutchison, says that out of cycle rate rises are likely to continue across the Australian banking sector, the impact of which will be felt by borrowers with a variable mortgage.

“Melbourne Cup day is traditionally a popular period to move rates. The cash rate has moved on Melbourne Cup day 10 times since 1991 when the modern adjustment cycle began – down four times, and up six.

“The f​inder.com.au Reserve Bank Survey​ found that 71% of experts predict that the increase of variable home loan interest rates out of cycle – kickstarter by Westpac earlier this month – would continue across the sector. As well as the big four jumping on board this trend, St George and Macquarie Bank also have imminent rate rises, which is six banks in total”, she said.

How could a future rate rise affect my repayments?

When contemplating rate hikes, Michelle Hutchison says that you should pose the question to your lender to see whether the bank is planning to increase its variable home loan rates.

“Some lenders, however, have a tendency to keep their rate rises quiet, which can make it difficult for Australians to keep track of movements in the home loan market. It’s important for borrowers to ask the question when they are speaking to lenders or applying for a new loan to find out if they have recently made any announcements or are planning to. It’s safe to assume that more lenders will follow these banks’ leads by raising their rates too.

“Based on a $300,000 mortgage and the current average variable owner-occupied home loan rate of 5.10 percent, a rate rise of 0.18 percentage points (the average rate rise of the six lenders who’ve announced rate rises thus far) will amount to an extra $33 per month for borrowers, or potentially $396 per year or $11,880 over 30 years.

“The big banks set the benchmark for what the market will do – five out of six lenders are moving on the same day as Westpac, with their new increased rates to become effective on 20 November.

“However, some smaller lenders may use this opportunity to win over new borrowers, by not following the big banks’ lead at all, or not raising their rates by as much as the market average. Regardless, it’s a great time to compare rates to see if you can get a better deal – a small change to your interest rate can save you thousands of dollars over the life of your loan”, she said.

What about the property market?

Results from the finder.com.au Reserve Bank Survey found that 66% of experts expect property prices to rise, or remain high, despite increasing rates for variable mortgages. Nearly half, or 49% or experts, expect no change to property prices and 17% forecast that the market will remain heated, and property values will continue to soar.

Although 34% of experts predicted a fall in property prices, the majority of experts disagreed as they noted that the market is strong enough to absorb rate increases without obstructing market growth or activity.

RBA Cash Rate Target Announcement October 2015

Reserve Banks holds 2.0% cash rate

Results from the finder.com.au Reserve Bank Survey found that 100% of the resident rate experts unanimously predicted that the rate would be held at 2.00% for October 2015. However, while experts were united in forecasting no movement for the cash rate at today’s Board meeting, they’re divided about future activity for the Australian dollar and how this may impact overseas transactions.

The majority of the expert panel expect the Australian Dollar to fall below $US0.65 and 58% of participants expect a cash rate rise as early as 2016.

Several experts said that the change in federal leadership has had a positive influence on the economic environment with the recent softening of the Australian dollar driving the export business.

Just two experts from the finder.com.au Reserve Bank Survey - Jonathan Chancellor from Property Observer and Shane Oliver from AMP Capital - expect the cash rate to fall in November this year, while the remaining 94% of respondents do not believe the cash rate will change again this year.

60% of respondents forecast a rate rise next year, while 40% expect a rise to occur beyond 2016. Of those experts who predict a cash rate rise in 2016, nearly half expect that this will occur in the fourth quarter of 2016.

Why hold the current cash rate?

While many believe the Reserve Bank is content with the current level of interest rates, the Bank may need to assess the direction of fiscal and monetary policy under new leadership.

With steady employment growth, improvement in the labour market and buoyant residential property markets, the Reserve Bank remains in its "wait and see" mode as the low cash rate harnesses economic activity.

Many of the resident rate experts noted that economic data remains neutral and that the Bank needs to hold rates to stimulate recovery in the non-mining sectors of the economy.

With accommodative domestic economic conditions, and low inflation at 1.5%, an additional rate cut is not priority as the Bank needs to see how volatility in global markets- notably China- develop before initiating a move.

What’s next? Future currency and rate movements

With respect to future movements of the Australian dollar, 76% of experts predict that the Australian dollar will fall below US$0.65 this cycle.

14% of respondents predict the Australian dollar will reach its lowest value against the US currency by the end of this year. However, the majority (72%) expect this to occur in 2016; and 44% of experts believe this will happen in the first half of 2016.
Our money expert, Michelle Hutchison, says that the depreciating Australian dollar will impact international money transfers and overseas property investments, so Australians should keep tabs on the movement of both the local currency and interest rates.

“It’s daunting to think just last year, in July 2014, the Australian dollar was buying almost US$0.95 and we were trading at parity with the United States from June 2012 to May 2013. Fast forward to September 2015, and an overwhelming majority – 86%– of experts in our latest survey predict the Aussie dollar will fall to US$0.70 by the end of this calendar year, with over two in five believing it will plummet further – to US$0.65 – by year’s end. This can have a significant knock-on effect for Australians, especially those heading overseas this summer.

“International money transfers and overseas property investment are also likely to be adversely affected. Whether you’re sending money overseas, buying anything offshore, travelling abroad or have a home loan, keep track of both movements to the Aussie dollar and interest rates as next year is set to get tougher”, she says.

RBA Cash Rate Target Announcement September 2015

Reserve Bank maintains 2.0% cash rate

The majority of economists from the monthly finder.com.au Reserve Bank Survey accurately predicted that the Reserve Bank would hold the cash rate at 2.0 per cent at today’s Board meeting.

31 out of 32 leading economists and commentators expected the cash rate would remain unchanged for September 2015, while just 1 respondent predicted that the cash rate would fall.

Most experts say that the Reserve Bank is still reviewing the impact of the latest two rate cuts which took place in February and May earlier this year. In particular, an improved labour market and a lower Australian dollar have contributed to the Reserve Bank’s call to keep the cash rate unchanged this month.

Why no movement for the cash rate?

With a steady unemployment rate and stabilisation in the labour market, further stimulus of monetary policy is not required as the Reserve Bank remains within its "comfort zone".

In particular, the Reserve Bank needs to observe if business confidence and investment have improved as a result of previous rate cuts, before it decides whether or not another rate cut is sufficient to achieve macroeconomic objectives.

Low interest rates have prompted borrowing and spending amongst Australian consumers and businesses, and credit has recorded moderate growth.

Given these conditions, the Reserve Bank judged that maintaining the cash rate was the appropriate course of action for September 2015.

What’s in store for the future?

Findings from the monthly survey found that 25 experts (75 per cent) did not expect the cash rate to move again this year, while 5 (16 per cent) predict that the cash rate will fall by the end of the year.

More than half (53 per cent) of the survey participants expect the cash rate to start rising in 2016, claiming that the final quarter of the year will be the most likely time for this to happen.

Our money expert Michelle Hutchison maintains that while record rates have been welcomed by borrowers, Australians should start preparing for future rate hikes.

“The finder.com.au Reserve Bank Survey has found that it’s not a matter of ‘if’ the cash rate will rise but, rather, ‘when’. However, there’s no need to panic and borrowers should use this time to do their research and scan the market to ensure they’re getting the best rate possible. Also, now’s the time to prepare for future rate hikes by making extra repayments while you can.

Auction clearance rates

While the official cash rate has remained on hold at 2.0 per cent for August 2015, Michelle Hutchison says that experts are divided about what will happen to properties going to auction this mortgage season.

“With the national average auction clearance rate increasing by approximately 10 percent over the past 12 months and the start of mortgage season just days away, we can expect the property market to remain competitive in the coming months. The Survey found that 19 experts (59 percent) expect auction clearance rates to stabilise at the current level, while one expert – Peter Boehm of onthehouse.com.au – believes auction clearance rates will boost even higher this mortgage season.”

“However, more than one in three experts (11 experts or 34 percent) expect auction clearance rates to fall, despite mortgage season being traditionally billed as the hottest time to buy and sell.”

When should I enter the market?

With many Australian borrowers hitting the property market in Spring, it’s important that you budget carefully, particularly with potential interest rate hikes around the corner.

Michelle Hutchison says that buyers who are thinking of waiting until the property market settles may want to reconsider.

“Almost three in five experts (59 percent) said that next mortgage season (September-November 2016) will not necessarily be a better time to buy than this coming mortgage season, but rather is likely to be the same as this season.

“Five experts (16 percent) said it will not be a better time to buy in 12 months’ time, while seven experts (22 percent) disagreed, believing buyers should hold out and buy next mortgage season rather than this coming one.”

You should allow for a 2-3 per cent buffer of funds to accommodate for future interest rate risks, as our record low rates aren’t here to stay, Hutchison added.

RBA Cash Rate Target Announcement August 2015

RBA holds cash rate at 2.0%

Most economists correctly predicted that the Reserve Bank of Australia (RBA) would keep the cash rate unchanged at 2.0 per cent for August 2015.

In fact, all 31 experts from the monthly finder.com.au Reserve Bank Survey expected no movement for the cash rate this month, and that it would remain at 2.0 per cent.

The majority of experts cited previous rate cuts in February and May this year, claiming that the Reserve Bank would need to enable the full impact of a lower rate to filter through the economy, before making a move.

Despite this, 19 per cent of the experts surveyed expect another rate cut by the end of the year, while 6 per cent expect the cash rate to rise in the final quarter of this year.

55 per cent of the respondents forecast the cash rate will start rising next year. Five believe the rise will occur in the second quarter of next year, and the remaining 12 expect rate rises to start in the second half of 2016.

Why hold the cash rate?

In a ‘wait and see’ mindset, the Reserve Bank decided to hold the cash rate at today’s Board meeting until further economic data is released.

The Reserve Bank wants to observe if business confidence, investment and employment have improved as a result of previous rate cuts before deciding whether or not another move is required.

Volatility across the global stage and the prospect of a US rate rise coupled with a robust Australian dollar contributed to the Reserve Bank’s decision to maintain the cash rate today.

If unemployment rises and the Australian Prudential Regulation Authority (APRA) continues to slow the pace of investor credit growth among deposit-taking institutions, property prices will be impacted.

With a lowering exchange rate and stable unemployment, the Reserve Bank has less pressure to change the cash rate as it enables broader sectors of the economy to enjoy a lower exchange rate.

Property market insights

Soaring property prices

Although the cash rate is being held, 68 per cent of experts predict that property prices will continue to rise for the rest of 2015.

Our money expert Michelle Hutchison says those looking to enter the property market this year should brace themselves for higher housing costs.

“While we may not see another rate cut this year, it’s still likely that property prices will continue to rise, which means higher costs for new borrowers.

“According to the finder.com.au Reserve Bank Survey, the majority of experts surveyed (21 or 68 percent) are expecting property prices will keep rising this year, while almost one in five (six of 19 percent) believe property prices will remain at the same level for the remainder of 2015.

“For the hottest property market in Australia, almost one in five experts (19 percent) believe the Sydney property market won’t ease for the next few years, while 61 percent expect it to ease next year, and five experts think it could be as early as this year.”

Is there a housing bubble?

Interestingly, the finder.com.au Reserve Bank Survey found the majority of panel experts believe there isn’t a national housing bubble -- at least not for the long term.

Michelle Hutchison confirms: “The vast majority (81 percent or 25 of the 31 experts surveyed) believe there is no housing bubble. However 5 experts (16 percent) expect the housing bubble will burst within the next 18 months. One of the experts – Shane Oliver from AMP – said there is one housing bubble in Sydney and it’s likely to start reversing in 2017.

When should I enter the market?

Our money expert Michelle Hutchison says that you should consider the timing in which you enter the property market so you can better manage your personal finances.

“We’re expecting more borrowers to start hitting the market in Spring, which is traditionally the busiest time for the property and home loan markets. If you’re planning to hit the market this mortgage season, be careful with your budget as it won’t be worth over-stretching yourself in the heat of the moment to buy a home when rate rises are also around the corner.”

RBA Cash Rate Target Announcement July 2015

Reserve Bank pauses rate at 2.00%

With an uncertain global economic climate, many held their breath in anticipation for the outcome of the Reserve Bank Board meeting this month.

Consistent with our monthly finder.com.au Reserve Bank Survey, which found that all 33 experts unanimously predicted the cash rate would be held at 2.0 percent this month, the Board has paused the cash rate for July 2015.

However, 38 percent of the panel participants surveyed expect the Reserve Bank to slash the cash rate by the end of this year, with nearly half predicting rates to drop as soon as August or September.

With this possible rate cut being expected to be 0.25 basis points, this could potentially bring the cash rate down to a new historic low of 1.75 percent.

Despite expectation, for the cash rate to plummet in the months to come, our money expert Michelle Hutchison advises that borrowers and first home buyers start preparing for future rate hikes, forecast to occur early next year.

Why hold the cash rate?

The Reserve Bank’s decision to hold the cash rate is justified by improved unemployment levels, rising housing costs and improved business confidence.

Many of the survey participants expressed their views that the cash rate was held so the Reserve Bank could buy more time to fully assess the impact of a lower rate on the economy, before easing further.

With financial pressures from overseas markets, uncertainty on the global stage, and predictions for a rate rise in the US later this year, the Reserve Bank decided to hold the rate at 2.0 percent this month as a conservative measure.

Moreover, as the Sydney and Melbourne housing markets continue to outperform, as indicated by continued strong clearance rates, the Reserve Bank will not initiate a further rate cut, just yet.

Held for now, but expected to rise.

Despite a likely rate decrease later this year, our money expert, Michelle Hutchison says borrowers shouldn’t become preoccupied with a rate cut but rather prepare for a future rate rise - expected to occur further down the track.

“While borrowers with a variable rate home loan shouldn’t hold their breath for lenders to pass on a full cash rate cut if the Reserve Bank drops the cash rate again, this is the least of their worries compared to expected rising interest rates.

“The finder.com.au Reserve Bank Survey found the majority of experts (56 percent or 18 experts) are forecasting the cash rate will start rising in 2016, with two experts expecting the cash rate could increase this year. Another 13 experts believe the cash rate will rise after 2016. The average forecast for when the cash rate will rise is the last quarter of 2016.

What will rate rises mean for me?

Mrs Hutchison, our money expert, offers insight about how you can manage your personal finances in preparation for rate increases.

“It’s clear that interest rates will be on the way up, so borrowers need to make sure they are prepared by reviewing their budgets and working out if they can afford higher costs. For instance, for every 0.25 percentage points increase to a $300,000 home loan, it will cost about $50 more in repayments per month.

“Borrowers with this size mortgage should factor in at least $400 extra in monthly repayments and if you can’t afford this extra cost now you will need to consider your options before rates start to rise such as refinance to a cheaper lender, fix your home loan or downsize.”

What if I’m a first home buyer?

With the degree of global economic uncertainty, Mrs Hutchison believes that this could create more pressure, and barriers to entry, for first home buyers looking to get a foot in the door.

“The latest global economic uncertainty has thrown a spanner in the works for our local economy, as the Reserve Bank could now look to minimise the impact by reducing the cash rate this year.

“However, this could lead to further pressure on the housing market, as lower interest rates could fuel further demand for investors and refinancers, leaving first home buyers behind.”

“Even if interest rates fall further this year, it’s likely that they won’t stay lower for long, as our survey found that rate hikes are around the corner.

“Borrowers who are planning to enter the market, buy an investment or refinance need to ensure they factor in higher costs for repayments rather than the other way around or face financial stress in the near future,” said Mrs Hutchison.

RBA Cash Rate Target Announcement June 2015

Although many predicted that another cash rate cut was on the cards, several economists correctly predicted that the Reserve Bank of Australia (RBA) would maintain the current cash rate for June 2015.

At today’s meeting, the Board decided to keep the cash rate of 2.00 per cent unchanged.

According to the finder.com.au Reserve Bank Survey, 100 per cent of industry experts (34 respondents) forecast that the RBA would break their trend of easing monetary policy by holding the rate at 2.00 per cent.

However, 68 per cent of these experts believe interest rates will begin to rise in 2016, with some predicting the rate will continue to rise beyond 2016.

Why maintain the cash rate?

With soaring property prices and the recent recovery of commodity prices, the RBA has initiated their “wait and see” strategy by holding the cash rate at 2.00% this month.

As inflation sits comfortably at 1.3 per cent and unemployment drops, the need for a further rate cut has lessened.

It is believed that the RBA has maintained the cash rate so that they can fully assess the impact of the lower cash rate on the economy. In particular, they will wait to observe the influence of a low rate on economic growth, unemployment and investment behaviour in the residential sector.

However, if growth continues in overseas markets such as the US and China, it is probable that the RBA will start tightening monetary policy in the near future.

Interest rates forecast to take a turn

Despite the RBA’s decision to keep the cash rate unchanged, you should start preparing for further rate increases. It is believed that more borrowers will start fixing their home loans in the anticipation of interest rate hikes next year.

The majority of experts (21) predict there will be no cash rate movement for the remainder of this year.

Interestingly, the Associate Professor of Economics at Melbourne Business School, Mark Crosby, forecasts that the cash rate will start rising in the final quarter of 2015.

How high will the cash rate go?

According to the finder.com.au Reserve Bank Survey, industry professionals believe the cash rate will increase to 3.70 per cent, while eight experts are predicting the rate will hit above 4.00 per cent. Two of the survey participants predicted the cash rate would reach as high as 5.00%.

How will this affect me?

Based on the key findings of the finder.com.au Reserve Bank Survey, our money expert Michelle Hutchison said borrowers will begin to lock in fixed home loan rates as a consequence of imminent rate hikes.

"The majority of experts from the Survey (82 percent) are expecting to see more borrowers concerned about rising interest rates and lock in a fixed rate home loan. Of these experts, 21 of which are expecting this will happen this year, while seven don't think more borrowers will fix until next year. There were also four experts who don't think more borrowers will fix at all.

"While it is a good idea to fix your home loan if you're concerned that rates will rise, it's a worry that some experts don't think more borrowers will fix. We're seeing record low numbers of borrowers fixing their home loans and as prices rise and rate hikes on the horizon, some borrowers will be under financial strain if they don't consider fixing while rates are low.”

RBA Cash Rate Target Announcement May 2015

RBA reduces the official cash rate to a new low of 2.00%

rba-may

As Australia has recently experienced below trend growth and relatively high unemployment, the Reserve Bank of Australia decided to reduce the cash rate by 25 basis points at today’s board meeting.

The finder.com.au Reserve Bank Survey found that 53 per cent of the 34 leading experts forecast the cash rate to hold today. Whereas 47 per cent of the survey participants accurately anticipated a cut, including industry specialists from the Commonwealth Bank and Westpac.

While just six of these industry experts are predicting a further cut to the cash rate later this year, 63 per cent believe interest rates will start rising from as early as February 2016.

What triggered the RBA to cut rates?

The Reserve Bank’s decision to ease monetary policy was made with the objective of fostering sustainable growth in demand and maintaining inflation within target.

This lowering of the cash rate has been a result of below-trend growth, high national unemployment and weak domestic demand.

With a high Australian dollar, few inflationary pressures and plummeting commodity prices, the Reserve Bank opted to slash the official cash rate to 2.00%.

By lowering the official cost of borrowing, the Reserve Bank hopes to bolster consumer and business confidence. That is, lower rates will mean that households have lower mortgage repayments which they hope will bolster consumer spending.

Future Interest Rate Hikes

Despite today’s decision, finder.com.au money expert Michelle Hutchison, says borrowers should start preparing for future interest rate hikes.

"While most borrowers who have a variable rate home loan will be rejoicing in saving about $47 per month for an average $300,000 home loan from today's rate cut announcement, it looks like the party is over for more rate drops."

"Interest rate hikes are right around the corner. If you're not preparing now for higher costs, you could end up in financial trouble from next year.

The finder.com.au Reserve Bank Survey found that the cash rate is forecast to rise to 4 per cent, meaning that variable home loan interest rates will average at around 7.10 per cent. This could have serious implications for mortgage repayments, with some borrowers paying up to $341 extra each month for an average $300 000 loan.

Mrs Hutchison wants borrowers to prepare for these future rate increases now by making more informed decisions and doing their due diligence: "There would be a lot of borrowers who are not factoring in this higher cost and will need to start preparing now to ensure they won't be under unnecessary pressure from next year by comparing home loans, asking their lender for a discount, switching to a cheaper deal and making fortnightly or weekly repayments rather than monthly."

How will the cut affect my finances?

When the Reserve Bank drops the official cash rate, this makes it more affordable for them to borrow money, meaning that they can lend out money at a cheaper rate. In effect, this means that you can borrow more, or spend less of your income on your home loan.

  • Home owners: If the rate cut is passed on by your lender, you may see your mortgage repayments fall. On a variable loan of $300 000 over 30 years, with a rate of 5.9% p.a., a 0.25% rate cut could see your repayments decrease by approximately $47 each month.
  • Home buyers: A rate cut can affect you in various ways if you’re a home buyer. As rates are lower, the cost of a home loan when you find a property will be lower. However, a cut in the official rate can see a rise in demand as many choose to enter the property market as housing is more affordable. This can increase competition which can make it difficult for you to secure your property.
  • Savers: Interest rates are a major incentive to open a savings account as this contributes to the value of your savings over time. Unfortunately, reductions in the interest rate will decrease the amount you earn with term deposits and standard savings accounts.
  • Investors: Bondholders will be negatively affected by interest rate cuts as it means the value of their long term investment is less, which will reduce their return on investment.

RBA Cash Rate Target Announcement April 2015

RBA maintains current cash rate at 2.25%

RBA April 2015

Although consensus maintained that another cash rate cut was on the horizon, many economists predicted that the Reserve Bank would maintain the cash rate this month. With 75% of RBA experts expecting the cash rate to remain on hold, it comes as no surprise that today the Reserve Bank confirmed this speculation.

At today’s meeting, the Board decided to maintain the current cash rate of 2.25%, while they assess the impact of the rate cut earlier this year. However, Glenn Stevens claimed that further easing of policy may be required in the near future to create sustainable growth in demand and to meet inflation targets.

finder.com.au's money expert, Michelle Hutchison also provided insight into the Reserve Bank’s decision to maintain the cash rate: "Today's decision by the Reserve Bank to leave the cash rate unchanged at 2.25% is great news for first home buyers, as lower rates have led to higher consumer confidence and increasing property prices”.

According to Stevens, "economic growth is continuing at a below-trend pace, and with weak domestic demand and higher unemployment, the economy is operating with spare capacity". As employment rises, it is likely that inflation will remain within the 2-3 per cent target range.

With low capital expenditure, another rate cut would stimulate economic growth. However, the Reserve Bank has decided to hold off from cutting rates this month in fear of fueling the strengthening Australian property market.

Why keep the cash rate on hold?

As many predict another rate cut in the near future, it is believed that the Reserve Bank will wait until May or June to issue a further rate cut to boost consumer confidence. With moderate national employment, capital expenditure and inflation at 1.7%, it is believed that a further rate cut will be inevitable over the next few months.

Money expert, Michelle Hutchison confirms: "The latest finder.com.au Reserve Bank Survey found that there is likely to be a cash rate cut in the next few months and that will likely be the bottom of the cycle. However, the majority (67%) of the 42 experts are forecasting interest rates to start climbing by as early as the first quarter of next year. The cash rate is expected to rise to about 3.75%, which is another six 0.25 percentage point rate increases and will take the average variable home loan interest rate to 6.75%. For a $300,000 home loan, that would cost an extra $289 per month in mortgage repayments (from $1,657 to $1,946).”

It is believed that the Reserve Bank has decided to keep the cash rate on hold to optimise downward pressure on the Australian dollar.

As the Reserve Bank prefers to coordinate its monetary policy decisions with the Consumer Price Index data, due to be released later this month, they are able to buy some time before slashing rates further.

As the Australian economy is at risk of further fueling property prices, the Reserve Bank will maintain the current cash rate to assess the impact of the last rate reduction on Sydney’s housing market.

The Reserve Bank is anxious about encouraging a lack of capital lending in the face of a depreciating currency.

Housing market concerns

In recent times, record low mortgage rates have fueled an already strong Australian housing market by driving up property prices. Recent data from the Australian Bureau of Statistics (ABS) suggests that first home buyers have been struggling since 2011, with just 5 963 first home buyer loans being financed in January this year.

Money expert, Michelle Hutchison stated: "The finder.com.au Reserve Bank Survey in December 2014 showed the majority of experts are expecting property prices to rise as a result of rate cuts this year so first home buyers can breathe a sigh of relief, for now.”

Credit has achieved moderate growth, with stronger growth in lending to investors in the housing market. Dwelling prices continue to rise strongly in Sydney although trends have varied across a different regions in Australia. Michelle Hutchison confirms: "The past year saw the median property price increase by 7.4 percent to $559,000 (CoreLogic RP Data). If first home buyers have to borrow over $38,000 more for an average property – from $520,484 to $559,000 – the higher property price would outweigh the last rate cut. In fact, even if there was another cash rate cut, it won’t outweigh the extra cost in monthly repayments if you paid $38,000 more for a property.

How low interest rates affect you

As we are now seeing some of the lowest cash rates over the past two decades, this low interest environment makes it cheaper for lenders to borrow money, so they can lend out money at a cheaper rate. In turn, this means that people can borrow more, or spend less of their income towards their home loan. However, it is important to note that there are numerous economic factors, apart from interest rates, that may affect your financial situation.

  • Homeowners: Generally, low rates will see your monthly mortgage repayments decrease. On a variable loan of $300 000 over 30 years, with a rate of 5.9% p.a., a 0.25% rate cut could see your repayments drop by approximately $48 each month.
  • Home buyers: As rates are lower, the cost of a home loan when you find a property will be less. However, a cut in the official rate can see a rise in demand as many choose to enter the property market as borrowing costs are less. This can drive up property prices and increase competition which can make it difficult for you to secure your property.
  • Credit card holders: Credit card interest will fluctuate based on the type of purchase made and the consumer’s history. Not all credit cards will be subject to changes in the national cash rate, as it will depend on the lender.
  • Savers: Interest rates are a major incentive to open a savings account as this contributes to the value of your savings over time. Unfortunately, low interest rates will affect how much money consumers are able to accrue through term deposits and standard savings accounts.
  • Investors: Bondholders will also be negatively affected by low interest rates as it means the value of their long term investment is diminished, which will reduce their return on investment.

Despite lower rates leading to lower mortgage repayments, Michelle Hutchison warns that consumers must research different home loans to find the best offer: "There is still a huge difference in what lenders are offering, and on the pointy end it is very competitive. For instance, variable home loans start from 4.23% (by Loans.com.au). Lenders are also competitive and keen to sign up new customers so it's worth doing your research, find out how your home loan compares to the rest of the market, ask your lender for a discount or switch to a cheaper deal."

RBA Cash Rate Target Announcement March 2015

RBA-Feature-ImageNo rate cut despite the slow pace of the Australian economy

Despite all the speculation, the Reserve Bank of Australia has decided to leave the official cash rate as it is at 2.25%.

Predictions for a rate cut from finder.com.au's 37 leading experts and economists have been increasing since the last week with new data released from the Australian Bureau of Statistics (ABS).

Key points from December estimate that capital expenditure fell 0.8% while the seasonally adjusted estimate fell 2.2%. Our economists were split on their forecasts for the 3 March 2015 board meeting. More than half (57%) expected the cash rate to hold while 16 experts (43%) incorrectly bet on a cut.
Out of the major four banks, economists from ANZ, Commonwealth Bank and Westpac all expected the cash rate to fall, while NAB’s Chief Economist, Alan Oster, forecasted no change stating that 'it will take some time to see the impact of the February cut.'
Of those who are expecting a cash rate cut on Tuesday, issues impacting their decisions include:

  • More pressure on the Australian Dollar to depreciate
  • A weaker than expected domestic and global economic outlook
  • Rising unemployment and
  • More than one cash rate cut being needed to stimulate the economy.

A second RBA cash rate cut in two months?

Bill Evans, Chief Economist at Westpac was one of the two experts who had correctly said that the RBA would be cutting the official cash rate in February. His bet for March was that rates would be cut again.

'A key issue is whether the Bank sees adverse development as reason to further downgrade its already pessimistic outlook for the labour market or is inclined to dismiss it as one month volatility. A major cost in delaying the next move is that the Australian dollar might start responding to a benign rates outlook.'

'Another key point is that the reasons given by the Bank in its recent communications, including the minutes, justify more than one move in total: restrained pace of wage increases, low rates of inflation likely to be sustained, a lower exchange rate was likely to be needed, fewer indications of near term strengthening in growth than previous forecasts would have implied, unemployment rate likely to peak a little (and later) than in the previous forecast.'

For the economists and commentators who correctly expected the cash rate to remain on hold at 2.25% today, they predominantly believed the latest cash rate cut earlier in February required more time to filter through the economy before the Reserve Bank decided to cut again.

'We think that the RBA will still want to give the economy more support, but it will prefer to wait at this meeting so it can assess developments, particularly the currency and housing markets,' says Janu Chan, Senior Economist at St.George.

'The RBA may also want to wait to see how the economy reacts to the rate cut in February first before cutting again. A rate cut over the next few meetings remains possible. Capex data released next Thursday could be critical to the RBA's decision in March.'

What does the rate hold mean for property?

Despite the key topic of our elastic housing market, lower than average interest rates have meant lower borrowing costs. With Australia's housing boom nearly spinning out of control, the question is whether the opportunity for first home buyers will ever come.

'It’s going to be one of the toughest years yet for first home buyers,' says Michelle Hutchison, Money Expert at finder.com.au.
Our experts are expecting property prices to increase as a result of the rate cut, increasing the demand of property. But since rates are holding steady for now, first home buyers still have a chance to get their foot in the door.
First home buyers will need to work harder to jump onto the property ladder this year, with fewer first home buyers expected to enter the market.
'In fact, finder.com.au estimates that we will see just over 92,000 first home buyers this year, which will be the third consecutive year that first home buyer numbers have declined. Last year there were 94,571 first home buyer home loans financed in Australia, down from 98,217 in 2013 and close to 100,000 in 2012.'

What does the future hold?

According to the finder.com.au RBA Expert Survey, the cash rate is likely to start rising by June 2016, and climb up to 3.50 percent at the peak of the next cycle, based on the average forecasts. The majority (69%) of the 35 who responded to this question are expecting the cash rate to reach between 3 and 4%, while 14% of these respondents expect the cash rate to peak above 4%.

RBA Cash Rate Target Announcement February 2015

The RBA have started the new year with a rate cut, lifting confidence for Australia

As a result of this afternoon’s meeting at 2:30pm AEST, the Reserve Bank of Australia (RBA) has decided to cut the official cash rate to its new, recorded, lowest of 2.25%.

Two out of our 30 finder.com.au experts had predicted this correctly, only 6% of our total. This is also the first time since August 2013 where we’ve seen some of our experts expect the cash rate to move.

Interestingly, almost all of our experts (24 out of 30) have changed their forecast for when they think the next cash rate move will be. The majority, about 60% are forecasting a cash rate change this year.

Compared to last month, just three panelists were expecting the cash rate to move in the first quarter of 2015.

The rate cut comes as a surprise for most of our experts, as most had predicted rates to be held steady due to the period of stability in December.

What were the economic indicators?

Strong data for jobs and building approvals have also strengthened the economy and softened inflation indicators.

A weaker Australian dollar and reduced oil prices have also contributed to the argument that rates will stay on hold.

‘Stronger than expected unemployment figures, a softer Australian dollar and falling oil prices have all combined to provide the RBA with enough breathing room to hold rates steady,’ says Grant Harrod, Chief Executive Officer at LJ Hooker.

‘Keeping the cash rate stable is expected to see demand for property remain elevated, as buyers continue to take advantage of the cheap mortgages on offer. That being said, property price growth will vary across markets, depending on affordability barriers and the strength of their local economies.’

However, other experts have actually urged the central bank to take action to maximise the potential boost to consumer confidence.

In 2014, the RBA pledged to prepare the market for a potential change, after 18 months of unchanged cash rates. Financial market betting also predicts that traders are less concerned about the preparation.

Former RBA governor, Bernie Fraser, also mentioned that low inflation had given a window for the RBA to start cutting rates.

Some of our other finder.com.au experts had supporting ideas, stating that a rate cut in February would be a better placed decision compared to March.

‘We continue to believe that the February rate cut is the most likely scenario,’ says Bill Evans, Chief Economist of Westpac.

‘With markets now settling on the strong likelihood of a March move we see February as a much more attractive option for the RBA.’


What drives interest rates?

  • - Supply and demand: an increase in the demand for credit will place an upward pressure on interest rates, and vice versa
  • - Inflation: higher inflation means interest rates will probably rise
  • - Government/Monetary policy: when the government buys or sells securities. If the government bought more securities, banks have access to more money than they can use to lend and therefore the interest rate will decrease

Compare home loans today

Whatever the RBA decides each month, it's always a good idea to ensure your home loan stacks up well against what else is being offered in the marketplace. You can compare some current home loan deals below.

Rates last updated May 27th, 2016
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Product nameInterest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
loans.com.au Move Fast Special - Owner Occupier Only
Enjoy a low interest rate, no application fee and fee-free redraws for loans between $50,000 and $500,000.
3.63% 4.03% $0 $375 p.a. 80% Go to site More info
NAB National Choice Package Home Loan - 2 Year Fixed (Principal and Interest)
A fixed rate home loan package with flexible repayments options.
3.89% 4.98% $0 $395 p.a. 95% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 2 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
3.79% 4.49% $0 $375 p.a. 85% Go to site More info
Australian Unity Kick Starter Home Loan
$0 ongoing service fees, maximum 80% LVR and a linked transaction account.
3.85% 3.88% $600 $0 p.a. 80% Go to site More info
IMB Budget Home Loan - LVR <80% (Owner Occupier)
A competitive budget home loan without any bells and whistles.
3.94% 3.99% $445 $0 p.a. 80% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive rate, partial offset account and redraw facility. NSW, QLD and ACT residents only.
3.99% 3.99% $0 $0 p.a. 85% Go to site More info
Heritage Bank Discount Variable Home Loan - Special Rate Offer (Owner Occupier)
A discounted interest rate home loan with no monthly fees.
3.98% 3.99% $600 $0 p.a. 95% Go to site More info
Teachers Mutual Bank Classic Home Loan - Owner Occupier
A basic home loan without all the bells and whistles you may not use with your home loan.
3.91% 3.96% $600 $0 p.a. 85% Go to site More info
CUA Fresh Start Basic Variable Home Loan - Owner Occupier
A basic home loan available only to customers who switch their everyday banking to CUA.
3.99% 4.04% $600 $0 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.69% 4.51% $0 $375 p.a. 85% Go to site More info
ClickLoans The Online Home Loan -  Owner Occupier ≤ 80% LVR
A home loan with 100% offset account and no monthly or annual fees.
3.84% 3.84% $0 $0 p.a. 80% Go to site More info
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier)
3 Years fixed home loan with a competitive rate.
3.99% 4.08% $395 $0 p.a. 80% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed
Enjoy a low interest rate home loan. Borrow up to 95% (with LMI) of your home loan value.
3.74% 4.84% $0 $0 p.a. 95% Go to site More info
Australian Unity Health, Wealth and Happiness Package - Owner Occupier
Get a 0.60% discount on your home loan with 100% offset and no ongoing fees.
4.00% 4.03% $600 $0 p.a. 90% Go to site More info
ME Bank Flexible Home Loan With Member Package - LVR <=80% (Owner Occupier)
Enjoy a discount of 0.79% off your interest rate with this new owner occupier home loan special offer.
4.01% 4.42% $0 $395 p.a. 80% Go to site More info
UBank UHomeLoan - 3 Year Fixed Rate (Investor)
Pay no ongoing fees on this investment loan fixed for 3 years.
3.99% 4.29% $395 $0 p.a. 80% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed
Get a short term fixed rate for that investment property with no application or ongoing fees.
3.69% 4.96% $0 $0 p.a. 95% Go to site More info
NAB Base Home Loan - Principal and Interest (Owner Occupier)
A competitive no frills home loan with no application fees for a limited time.
4.20% 4.20% $0 $0 p.a. 95% Go to site More info
Bankwest Complete Home Loan Package Fixed - 3 Year Fixed Rate (Owner Occupiers)
Take advantage of a low 3 year fixed rate, 40% offset account and no application fee.
3.99% 4.51% $0 $395 p.a. 90% Go to site More info
Beyond Bank Total Home Loan Package - 3 Years Fixed
A great fixed rate and great features including 100% offset
4.19% 5.04% $0 $395 p.a. 95% Go to site More info
Greater Bank Ultimate Home Loan - 1 Year Fixed (Owner Occupier)
Lock in an interest rate for 1 year and have access to extra repayments with free online redraw. NSW, QLD and ACT residents only.
3.89% 4.53% $0 $375 p.a. 95% Go to site More info
3.89% 3.89% $0 $0 p.a. 80% Go to site More info
4.24% 4.56% $0 $395 p.a. 90% Go to site More info
loans.com.au Fixed - 2 Year Fixed (Owner Occupier)
Another low interest rate offer from loans.com.au. No application fee to pay.
3.99% 3.93% $0 $0 p.a. 90% Go to site More info
ME Bank Basic Home Loan - LVR <=80% Owner Occupier
A low variable rate home loan with no application or ongoing fees.
4.44% 4.46% $0 $0 p.a. 80% Go to site More info
4.02% 4.43% $0 $395 p.a. 80% Go to site More info
IMB Essential Home Loan - LVR < 80% (Owner Occupier)
Get a discount on your rate and flexible repayment options with this loan.
4.24% 4.24% $0 $0 p.a. 80% Go to site More info
ME Bank Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier)
No application or ongoing fees and a competitive 2 year fixed rate.
4.29% 4.91% $0 $0 p.a. 95% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Years Fixed
Split your home loan for free with one of the lowest fixed home loan rates.
3.99% 4.80% $0 $0 p.a. 95% Go to site More info
UBank UHomeLoan Variable Rate - Real Reward Offer (Owner Occupier Interest Only)
Enjoy a competitive variable rate home loan from UBank.
4.13% 4.13% $0 $0 p.a. 80% Go to site More info
Greater Bank Great Rate Home Loan - Discounted 1 Year Fixed ($150K+ Owner Occupier)
A discounted 1 year fixed rate if your loan has an LVR under 80% and is more than $150k. NSW, QLD and ACT residents only.
3.89% 4.34% $0 $0 p.a. 85% Go to site More info
loans.com.au Fixed - 3 Year Fixed (Owner Occupier)
Low rate 3 year option with no ongoing fees or application fee, loans.com.au is an award winning home loan lender.
3.99% 3.93% $0 $0 p.a. 90% Go to site More info
NAB National Choice Package Home Loan - 5 Year Fixed (Principal and Interest)
A competitive home loan comes with flexible features.
4.59% 5.07% $0 $395 p.a. 95% Go to site More info
CUA Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier)
Lock in a competitive rate for three year with CUA.
4.09% 4.67% $600 $0 p.a. 95% Go to site More info
NAB National Choice Package Variable Rate - $250k to $749,999 P&I
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4.50% 4.89% $0 $395 p.a. 95% Go to site More info
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier)
Fee free extra repayments available during the fixed term. $1,500 cash back offer for refinancers. Conditions apply.
4.19% 5.13% $0 $395 p.a. 95% More info
4.19% 5.39% $0 $395 p.a. 95% More info
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years
A low interest rate home loan with a low service fee.
4.19% 5.01% $0 $395 p.a. 95% More info
St.George Basic Home Loan - Promotional Rate (Owner Occupier >$150k)
A no frills home loan with competitive rate.
4.04% 4.05% $0 $0 p.a. 95% More info
Westpac Flexi First Option Home Loan - Special Offer
Discount off the standard interest rate for new owner-occupier loans for the first 2 years.
3.75% 4.16% $0 $0 p.a. 95% More info

Compare savings account interest rates today

It's also a good idea to regularly compare savings accounts to ensure you're still getting a competitive interest rates. Interest rates for high interest savings accounts also increase if the cash rate increases, therefore getting a higher return on your investment.

Rates last updated May 27th, 2016
$
$
months
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
ME Online Savings Account
Ongoing 3.35% p.a. variable rate when you link to a ME Everyday Transaction account and make a weekly purchase with your Debit MasterCard using tap & go. Available on balances up to $250,000.
3.35% 1.55% 1.80% $0 $0 / $0 Open More
Citibank Online Saver
Introductory rate of 3.40% p.a. for 4 months, reverting to a rate of 2.00% p.a. Available on balances below $500,000.
3.40% 2.00% 1.40% $0 $0 / $0 Open More
ING DIRECT Savings Maximiser
Ongoing, variable 3.00% p.a. when you link to an ING Orange Everyday bank account and deposit + each month. Available on balances up to $100,000.
3.00% 2.00% 1.00% $0 $0 / $0 Open More
Bankwest Hero Saver
Ongoing, variable 2.90% p.a. rate when you deposit at least $200 p/m with no withdrawals. Available on balances up to $250,000.
2.90% 0.01% 2.89% $0 $0 / $0 Open More
ANZ Online Saver
Introductory rate of 2.90% p.a. for 3 months, reverting to 1.55% p.a. Available on the entire balance.
2.90% 1.55% 1.35% $0 $0 / $0 Open More
HSBC Serious Saver
Introductory rate of 2.50% p.a. for 4 months, reverting to 1.85% p.a. Available on balances up to $1,000,000.
2.50% 1.85% 0.65% $0 $0 / $0 Open More
Westpac eSaver
Introductory rate of 2.95% p.a. for 5 months, reverting to 1.50% p.a. Available on the entire balance.
2.95% 1.50% 1.45% $0 $0 / $0 Open More
ANZ Progress Saver
Ongoing, variable 2.26% p.a when you deposit at least $10 and make no withdrawals. Available on the entire balance.
2.26% 0.01% 2.25% $0 $10 / $10 Open More
HSBC Flexi Saver Account
Ongoing, variable 2.25% p.a when you make a minimum monthly deposit of $300. Available on balances up to $5,000,000.
2.25% 1.75% 0.50% $0 $0 / $0 Open More
Westpac Reward Saver
Ongoing, variable 2.25% p.a when you deposit at least $50 and make no withdrawals. Available on the entire balance.
2.25% 0.01% 2.24% $0 $0 / $0 Open More
St.George Maxi Saver
Introductory rate of 3.05% p.a. for 3 months, reverting to 1.25% p.a. Available on the entire balance.
3.05% 1.25% 1.80% $0 $1 / $1 Open More
Bank of Melbourne Maxi Saver
Introductory rate of 3.05% p.a. for 3 months, reverting to 1.25% p.a. Available on the entire balance.
3.05% 1.25% 1.80% $0 $0 / $1 Open More
BankSA Incentive Saver Account
Ongoing, variable 2.25% p.a when you make at least one deposit and no withdrawals. Available on the entire balance.
2.25% 0.01% 2.24% $0 $0 / $1 Open More
Bank of Melbourne Incentive Saver
Ongoing, variable 2.25% p.a when you make at least one deposit and no withdrawals. Available on the entire balance.
2.25% 0.01% 2.24% $0 $0 / $1 Open More
BankSA Maxi Saver
Introductory rate of 3.05% p.a. for 3 months, reverting to 1.25% p.a. Available on the entire balance.
3.05% 1.25% 1.80% $0 $1 / $0 Open More
Disclaimer: The comments, forecasts, projections and other predictive statements by the panel of experts are assumptions based on currently available information. These forecasts are based on industry trends and economic factors that involve risks, variables and uncertainties. No guarantee is presented or implied as to the accuracy of these forecasts and consumers are advised to read product disclosure statements and understand if financial products are right for them before signing up.

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34 Responses to RBA Official Cash Rate Target Predictions, Historical Graphs & Data

  1. Default Gravatar
    Eric | February 25, 2016

    Hi Belinda

    Appreciate if you would also send me informations regarding findings of monthly RBA survey.

    Regards
    Eric

    • Staff
      Belinda | February 26, 2016

      Hi Eric,

      Thanks for getting in touch.

      On this page, you can view the RBA Cash Rate Target Announcements for each month from February 2015 until February 2016. You can also view the commentary of our resident rate experts in the lead up to each Board meeting which occurs on the first Tuesday of every month (except January).

      Please feel free to sign up to receive our detailed RBA cash rate updates by completing the form provided above.

      Regards,
      Belinda

  2. Default Gravatar
    Syed | December 8, 2015

    Hi,
    My new house is ready now and wondering what is the best time to sell, should I put my house in the market now or January or wait for the February. I am not committed any where so I can wait.

    Your advise needed.

    Thanks

    • Staff
      Belinda | December 9, 2015

      Hi Syed,

      Thanks for your enquiry.

      As finder.com.au is an online comparison service so we are not licensed to give you personal advice regarding the best time to sell your property.

      You can read our guide here about considerations when selling your house.

      All the best,
      Belinda

  3. Default Gravatar
    looooool | August 16, 2015

    hello.
    i wonder if i could receive some information regarding not only the latest current economic situation, but also cash rate movements over the year.

    • Staff
      Belinda | August 17, 2015

      Hi Dongho,

      Thanks for your enquiry.

      Above on this page you can view the ‘Reserve Bank monthly announcements’ to read about the cash rate movements and monetary policy decisions that have occurred over the course of this year. You can also sign up to receive our RBA cash rate updates by filling in the form provided above.

      In regards to the current economic situation, finder.com.au is an online comparative website and we can’t comment on the activity of the broader Australian economy.

      Thanks,
      Belinda

  4. Default Gravatar
    Oli | July 17, 2015

    Can you please send through the information on the RBA via email?
    I’m doing a school Economic assignment on the RBA and financial markets

    • Staff
      Belinda | July 17, 2015

      Hi Oli,

      Thanks for your enquiry.

      I’ve emailed you with some information regarding the findings from our monthly RBA survey.

      Please note that on this page you can sign up to receive our RBA cash rate updates.

      Thanks,
      Belinda

  5. Default Gravatar
    yazmin | July 7, 2015

    Hi,

    I was just wondering if I could have information regarding how interests rates will unfold over the next year. In particular, if the current interest rates will be appropriate for the economic conditions in Australia.

    Thank you
    Yazmin

    • Staff
      Belinda | July 8, 2015

      Hi Yazmin,

      Thanks for your enquiry.

      Firstly, I’d like to point out that finder.com.au is an online comparison and general information service so we’re not in a position to forecast interest rates.

      However, on this page you can sign up to receive our RBA cash rate updates which you might find useful.

      Thanks,
      Belinda

  6. Default Gravatar
    Jeff | June 22, 2015

    I also would like to know what the RBA is likely to do with interest rates over the next 12 months or at least material to allow me to make my own assessment please.

    thank you

    Jeff S

    • Staff
      Jodie | June 22, 2015

      Hi Jeff,

      I have emailed you the information we sent to others people who have asked us regarding the RBA.

      Regards
      Jodie

  7. Default Gravatar
    TJ | June 17, 2015

    Hi,

    I also would like to know what the RBA is likely to do with interest rates over the next 12 months

    Regards

    • Staff
      Jodie | June 17, 2015

      Hi TJ,

      Thank you for making contact with finder.com.au, an online comparison website.

      I have sent through to you via email the same information regarding the RBA predictions that was sent to Patrick by mu colleague Belinda, I hope this helps.

      Regards
      Jodie

  8. Default Gravatar
    Hi | June 12, 2015

    What is the RBA likely to do with interest rates within; 3 months, 6 months, 12 months, and 18 months timeframes.

    Refer to movement in interest rates (up, down or no change) and provide reasons.

    • Staff
      Belinda | June 15, 2015

      Hi Patrick,

      Thanks for your enquiry.

      I’ve sent you an email with some information and findings from our monthly Reserve Bank Survey.

      Kind regards,
      Belinda

    • Default Gravatar
      Hi | June 15, 2015

      Hi Belinda,
      Thanks for your assistance! I found it quite useful.

  9. Default Gravatar
    | May 11, 2015

    Hi,

    I would like to know when are they going to cut interest rates on Credit Cards ?

    Why is the government so spineless when it comes to forcing Banks to lower credit card rates.

    • Staff
      Sally | May 19, 2015

      Hi Ken,

      Thank you for your question.

      Interest rate changes in a product range is subject to the bank’s individual lending policies. In regards to monetary policy and the interest rates of banks, changes in the interest rate will create an inverse movement in the monetary supply of an economy, affecting the supply and demand of monetary assets. For more information on why banks need to react accordingly to monetary policy changes it may be recommended to seek the advice of an accredited economic reporting body.

      I hope this answered your question.

      Thanks,

      Sally

  10. Default Gravatar
    phil | May 5, 2015

    what time is the decision made

    • Staff
      Elizabeth | May 5, 2015

      Hi Phil,

      Thanks for your question.

      The decision is announced at 2:30pm.

      Thanks,

      Elizabeth

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