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RBA keeps cash rate at 4.10%


The cash rate has now held steady for 3 months. Are rate rises finished?

The Reserve Bank has kept the official cash rate at 4.10% in Phillip Lowe's last meeting as RBA governor.

97% of our expert panel correctly predicted the decision. Two-thirds of experts also believe the cash rate has now peaked for the time being.

Whether that proves to be the case is the million dollar question for savers, mortgage holders and first home buyers alike.

So is this the end of rates rises?

Inflation has slowed over the last few months, and household spending is also down, so it's feasible that the RBA will see no reason to raise rates again this year.

But inflation is still above the RBA's target range of 2-3%, which means it's impossible to rule out another hike if current inflation figures remain stubborn.

What does this mean?

If rates truly have stopped rising, there could be big knock-on effects for the housing market.

For one, it means there'll be no additional pain for the 40% of mortgage holders already struggling with home loan repayments.

Buyers (including FHBs) looking to see where rates landed before committing may also now be more likely to enter the market.

House prices across the 5 major capital cities are already up 3.3% on last quarter, and it's hard to see prices dropping if the market is confident rates are staying put.

It also suggests savings account rates may have capped out. If you haven't already, make sure you're keeping your savings with a bank offering a competitive interest rate.

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