RBA cash rate hold: Why Aussies are refinancing in record numbers
As the low home loan rate environment endures, Australian borrowers refinanced $17.2 billion in 1 month.
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- 100% of our experts correctly predicted that the RBA would hold the cash rate at its meeting on 07 September 2021
- The official cash rate remains at the historic low of 0.10%
Next rate meeting: The board of the Reserve Bank meets on 05 October 2021 to decide the future of the cash rate.
Finder surveys over 40 economists and property experts every month to forecast the RBA's next cash rate decision. Experts also provide commentary on the current state of the property market and the Australian economy. We update the page with new forecasts at the end of the month and again on the first Tuesday of the month, when the board of the Reserve Bank meets to make its decision.
The RBA sets the official cash rate. This affects interest rates on home loans, savings accounts and other financial products. Rate cuts or increases have a big effect on borrowing costs and the Australian economy. The bank's board meets every month (except January) to decide the future of the cash rate.
On this page you can see our panel of experts and their predictions on future rate cuts or increases.
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The latest cash rate analysis from the experts
Here are the most recent cash rate predictions and commentary from the experts in our panel for the September 2021 cash rate decision.
Shane Oliver
Shane Oliver
August
HOLDSeptember
HOLDThe lockdown and its hit to economic activity has further delayed the time when the effective RBA’s conditions - full employment and 3% or more wages growth to sustain 2-3% inflation - will be met to justify a rate hike.
Leanne Pilkington
Leanne Pilkington
August
HOLDSeptember
HOLDProlonged lockdowns have left the economy delicately poised. The RBA has previously stated its unwillingness to drop rates further, neither is a timeframe clear for an increase to rates to be considered again. The hold pattern remains necessary.
Geoffrey Kingston
Geoffrey Kingston
August
HOLDSeptember
HOLDI suspect the Fed will hike in Q4 2002
Michael Yardney
Michael Yardney
August
HOLDSeptember
HOLDThe Coronavirus Cocoon many Australians are finding themselves in will slow down our economic growth and stall wages growth and inflation. Changes in interest rates are a long way off.
Nicholas Gruen
Nicholas Gruen
August
HOLDSeptember
HOLDAt some stage household balance sheets will be spent
Saul Eslake
Saul Eslake
August
HOLDSeptember
HOLDI take the RBA at its word when it says it won't begin tightening monetary policy until the labour market is sufficiently tight to generate wage inflation that's sufficiently strong to push 'underlying' consumer price inflation sustainably into the 2-3% target range - and while I think that may well be sooner than the RBA's "central case" of 2024, I don't think it will be any earlier than mid-2023
Noel Whittaker
Noel Whittaker
August
HOLDSeptember
HOLDIt's pure speculation so much depends on how quickly we come out of the pandemic. And when Travel is free.
Peter Boehm
Peter Boehm
August
HOLDSeptember
HOLDThe prolonged lockdowns in Sydney and Melbourne will likely show the Australian economy has entered into a double dip recession. We'll know more once the June and September quarter GDP figures are published, but economists are tipping a June quarter contraction, and there is no reason to believe September will be any different. Combine this with the posturing of some Labour premiers about keeping borders shut, regardless of whether the 70% to 80% vaccination targets are met, and we have a recipe for economic uncertainty, at least in the short term. For these reasons, the RBA has no option but to keep rates on hold for now.
David Robertson
David Robertson
August
HOLDSeptember
HOLDRBA rate hikes remain well down the path, around early to mid 2023. The NSW, ACT and Victorian lockdowns highlight the need for more government support measures, to help households and businesses through to year-end, when an 80% adult vaccination rate will allow mobility and the economy to run near full capacity.
Tony Makin
Tony Makin
August
HOLDSeptember
HOLDAs the evidence mounts that the inflation spike in the US is not temporary, the US Fed will continue to tighten US monetary policy. This will raise world interest rates and depreciate the $A, other things the same, which will compound the inflationary pressures building here. Sooner or later, the cash rate will have to rise. Meanwhile, ongoing COVID-related federal and state budget deficits will exert further upward pressure on bond yields.
Dr Craig Emerson
Dr Craig Emerson
August
HOLDSeptember
HOLDThe RBA has effectively so indicated.
Rich Harvey
Rich Harvey
August
HOLDSeptember
HOLDRBA said rates on hold till 2023 Extended lockdowns hampering economic recovery
Ben Udy
Ben Udy
August
HOLDSeptember
HOLDWage growth remains subdued and the current lockdowns will probably increase labour market slack in the near term. Even so, we still expect wage growth to rise faster than the RBA anticipates in 2022. So we expect the RBA will decide to lift rates in early 2023, rather than 2024 as the Bank currently expects.
Julia Newbould
Julia Newbould
August
HOLDSeptember
HOLD
Susan Mitchell
Susan Mitchell
August
HOLDSeptember
HOLDI don't expect a change to the cash rate in September but I'm eager to see what RBA Board members decide around the bond purchase program. The economic setback caused by the ongoing lockdowns and climbing case numbers in New South Wales could push the RBA to send a strong signal at its September meeting. Unsurprisingly, the uncertainty driven by the Delta strain is encouraging borrowers to seek better home loan deals with Mortgage Choice data revealing a surge in refinancing activity and an increasing preference towards fixed rates.
Jonathan Chancellor
Jonathan Chancellor
August
HOLDSeptember
HOLDThe prospect of a trickier recession than the last one throws up an interesting challenge for the RBA. It still sees things with a glass half filled perspective when so many businesses and landlords are sadly enduring or set for stressful times
Jeffrey Sheen
Jeffrey Sheen
August
HOLDSeptember
HOLDSustained inflation of wages and prices is only expected to require higher cash rates from 2023.
Matthew Peter
Matthew Peter
August
HOLDSeptember
HOLDThe advent of the delta strain means that RBA rate hikes are off the table until 2024. The real question facing the RBA is what to do with its QE program. They must reverse out the proposed tapering and delay the start of tapering until next year.
Sean Langcake
Sean Langcake
August
HOLDSeptember
HOLDThe current lockdowns will stall progress toward a tighter labour market and faster wage growth - the key triggers for an RBA rate rise.
Dale Gillham
Dale Gillham
August
HOLDSeptember
HOLDWith around half of Australia in lock down, the economy is really in a state of uncertainty as to what the future will bring. Given this consumers and business are being conservative right now and I believe we will not see any strong growth for at least the six month to one year.
Mark Brimble
Mark Brimble
August
HOLDSeptember
HOLDThe evolution of the COVID virus and mismanagement of the response to it is likely to lead to longer term impacts and thus a longer recovery period in which supportive settings will be needed for some time yet.
Nicholas Frappell
Nicholas Frappell
August
HOLDSeptember
HOLDThe RBA is likely to maintain bond purchasing given the current lock-downs. A possible decline in labour force participation may set the scene for rising real wages and scope for tightening end 2022.
Malcolm Wood
Malcolm Wood
August
HOLDSeptember
HOLDIt will only meet inflation sustainably within the target criteria late-22-early-23
Peter Tulip
Peter Tulip
August
HOLDSeptember
HOLD
Thomas Devitt
Thomas Devitt
August
HOLDSeptember
HOLDIt will take a while to get the sustained wage and inflation pressure that will justify a cash rate increase.
Angela Jackson
Angela Jackson
August
HOLDSeptember
HOLD
Jakob Madsen
Jakob Madsen
August
HOLDSeptember
HOLDRBA has committed itself to unaltered cash rate unless inflation picks up.
Tim Nelson
Tim Nelson
August
HOLDSeptember
HOLDGiven CoVID related financial impacts, fiscal policy will continue to do the heavy lifiting. Rates will eventually need to rise post CoVID. Important, regulators manage the emerging risks of asset price bubbles (equities and property)
Jason Azzopardi
Jason Azzopardi
August
HOLDSeptember
HOLDProlonged economic uncertainty driven by large inconsistencies in state policies.
Mala Raghavan
Mala Raghavan
August
HOLDSeptember
HOLDAs long as inflation and wage rates are subdued, cash rate will not rise. The chances of these two variables rising in the near future is very slim, mainly due to the spread of Delta strain of the coronavirus in the two major cities, slowing economic growth, sluggish household consumption, declining business investments, especially in the non-mining sector, and underutilization of labour force.
Mark Crosby
Mark Crosby
August
HOLDSeptember
HOLD
Brodie Haupt
Brodie Haupt
August
HOLDSeptember
HOLDWith continued lockdowns and rising pressure on the economy, I don't think there will be a change to the cash rate until 2023.
Mathew Tiller
Mathew Tiller
August
HOLDSeptember
HOLDThe economic impact of the extended lockdowns and restrictions will see the RBA hold the cash rate steady over the medium term.
Dr Andrew Wilson
Dr Andrew Wilson
August
HOLDSeptember
HOLDNo change in fundamental economic weakness confirmed again with low wages growth despite robust labour market. As usual - absolutely no plausible case on current data for higher rates over foreseeable future. And then there is covid.
Christine Williams
Christine Williams
August
HOLDSeptember
HOLDGlobal conditions will dictate RBA decisions
Stephen Halmarick
Stephen Halmarick
August
N/ASeptember
HOLDCurrent lockdowns will reduce growth and wages/inflation and delay rate hike into 2023.
Alex Joiner
Alex Joiner
August
N/ASeptember
HOLDThe economic weakness characterising the second half of 2021 has set back the recovery in the labour market and this will delay efforts by the Bank to return the economy to full employment and inflation to target.
Michael Witts
Michael Witts
August
N/ASeptember
HOLDThe timing of a move by the RBA will be a function of progress on the delta strain and the re-opening of the economy, these factors together with moves by the Federal reserve and other central banks will also come into play
Brian Parker
Brian Parker
August
N/ASeptember
HOLDWage and price inflation not likely to be high enough to force a rate hike from the RBA before 2023 at the earliest.
Bill Evans
Bill Evans
August
N/ASeptember
HOLDHow has the cash rate changed over time?
The graph below shows the movements in the official cash rate over time and is updated every month whenever the RBA announces a cut, raise or hold.
What is the official cash rate?
The Reserve Bank of Australia is the country's central bank. The RBA's monetary policy has three key objectives which are set out in the Reserve Bank Act 1959:
- The stability of the currency of Australia.
- The maintenance of full employment in Australia.
- The economic prosperity and welfare of the people of Australia.
Setting the official cash rate is one of the bank's key tools to influence monetary policy, inflation and the broader Australian economy. The bank's board meets on the first Tuesday of every month except January to set the cash rate. The RBA will either cut, raise or hold the cash rate.
Their decision is influenced by a range of factors including inflation, the performance of the Aussie dollar, unemployment, the housing market, and Australia's Gross Domestic Product (GDP).
For example, if inflation rises above the target rate it means that Australians are spending their money too freely and prices are increasing too rapidly. But if the RBA raises interest rates to make it more expensive to borrow money, the economy will settle and price increases will slow down. Conversely, the RBA will drop interest rates if inflation is too low and the economy is stagnating, encouraging more Australians to spend more money and stimulate economic growth.
How the cash rate can impact your finances
The RBA can do three things with the cash rate: increase it, lower it, or hold it. The bank generally moves the cash rate in increments of 0.25%, though it did make cuts of 0.10% and 0.15% in 2020.
What does a cash rate increase mean for you?
A higher cash rate makes borrowing money more expensive. This is bad news for borrowers. But it also means interest rates on savings accounts can increase, which is good for savers.
Here's how a cash rate rise affects your finances.
- If you have a home loan. If you have a fixed rate home loan you don't need to worry. Your rate will not rise during the fixed period. If you have a variable rate home loan your lender might increase your home loan rate in response to the RBA's decision. If this is the case, you should start comparing home loans and look for a better deal.
- If you have money in a high interest savings account. Rate rises mean higher interest rates on savings accounts. Again, look around and see if you can find a high interest savings account with a better rate.
What does a cash rate decrease mean for you?
A lower cash rate means borrowing money is cheaper. That's good news for people with mortgages, especially variable rate home loans, which are directly affected by the cash rate (fixed rate loans, as the name implies, don't change until the fixed period ends).
Here's how a cash rate cut affects your finances.
- If you have a home loan.If you have a variable rate loan, see how your lender responds to the cut. If your lender doesn'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. If you have a fixed rate loan you won't see any benefit now because your rate is fixed.
- If you have money in a high interest savings account. Your interest rate will likely fall. You might still be able to find a better deal elsewhere. If you are hoping to generate some wealth through interest you might choose to put your money in a term deposit or an investment fund instead.
Here's an example of how a cash rate cut or increae can affect a home loan. Let's assume the following:
- The RBA has reduced the cash rate by 0.25%.
- You have a variable rate home loan.
- Your lender passes on the RBA's raise or cut in full.
- Your loan term is 30 years.
Let's look at some example home loans:
Cash rate cut
- Loan amount: $400,000
- Interest rate: 3.50%
- Monthly repayment: $1,796
- Rate cut: -0.25%
- New rate: 3.25%
- New monthly repayment: $1,740
- Saving: $56 a month or $672 a year
Cash rate rise
- Loan amount: $600,000
- Interest rate: 3.50%
- Monthly repayment: $2,694
- Rate rise: 0.25%
- New rate: 3.75%
- New monthly repayment: $2,778
- Extra cost: $84 a month or $1,008 a year
Check out Finder's RBA survey press releases
Pre-announcement RBA Press Releases
- 82% of experts say vaccine passports are an economic necessity
- RBA survey: 63% of experts say Sydney lockdowns could cause another recession
- RBA survey: 68% of experts say NSW property prices will peak this year
- RBA Survey: Average Sydney house price to increase by $216,300 in 2021, say experts
- RBA Survey: 47% of experts say recent house price growth is “unsustainable”
- Finder’s RBA Cash Rate Survey: 74% of experts fear first home buyers will be pushed out of market
- Finder RBA Cash Rate Survey: Experts predict 12% rise in property prices by 2023
- Finder’s RBA Cash Rate Survey: Record refinancing to continue, house prices to jump
Post-announcement RBA Press Releases
- RBA Survey: Experts predict $76,000 increase in property in next 12 months
- RBA Survey: 73% of experts say Sydney’s lockdown will wipe $2bn or more off Australia’s GDP
- Finder’s RBA Survey: 87% of experts say consumer saving will dip as cash rate holds
- Finder RBA Survey: Mortgage borrowing to keep surging as cash rate holds at 0.10%
- Finder’s RBA Cash Rate Survey: 60% of experts blame BNPL for drop in credit cards
- Finder’s RBA Cash Rate Survey: Positivity around employment at record high, housing affordability nosedives
- Finder’s RBA cash rate survey: Experts reveal their top economic predictions for 2021
- Finder’s RBA survey: Cash rate cut, Melbourne and Sydney overvalued
RBA news and announcements
RBA holds cash rate, here’s why home buyers still aren’t benefiting
Refinancers can save big but for buyers hoping to enter the market, low rates mean little when prices are so high.
Read more…
Why RBA cash rate hold is good for borrowers, bad for affordability
This continuing period of rock-bottom rates is still fuelling more borrowing and higher prices, ultimately worsening affordability.
Read more…
Why are Aussies rushing to refinance their home loans?
The cash rate remains at a record low 0.10%, but borrowers have to switch to really take advantage of it.
Read more…
RBA holds – but can your bank increase your interest rate anyway?
Lenders have started lifting mortgage rates of their own accord. Your lender may have raised rates already.
Read more…More guides on Finder
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Banks passing on the August RBA cut on savings accounts
A full round-up of Australian banks that have announced rate changes for savings accounts.
-
What lenders have passed on the RBA rate cut?
At the May 2015 meeting, the RBA chose to cut the cash rate by 25 basis point, see which lenders chose to pass on the full cut to interest rates.
-
Why the banks have passed on the May RBA Rate Cut
In May, the Reserve Bank of Australia (RBA) cut interest rates to its lowest on record and many banks passed it on.
Ask an Expert
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
Hi Octo!
Thanks for getting in touch!
To know more information on your questions, you can fill in your email address in the box provided and you’ll be updated on RBA’s decisions on the official cash rate target.
While we provide you with general information, please know that we don’t stand as a representation for RBA or any company featured on our site.
Hope that clarifies!
Cheers,
Nikki
Do you think the cash rate will stay the same at the June RBA meeting?
Hi Taneesha,
Thanks for getting in touch with finder. I hope all is well for you. :)
Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:
– Household debt
– Inflation
– Wage growth
– Consumer Confidence Index
– Unemployment
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
What do you think that how the international economic condition influence the cash rate?
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
I hope this helps.
Have a great day!
Cheers,
Jeni
What do you think will be the next move for RBA on cash rate and when?
Thank you!
Hi Rob!
Thanks for the comment.
As of the moment, most of resident rate experts predict that rates will be the same. The cash rate target is released on the first Tuesday of every month except January.
You can follow the updated RBA forecast through our website.
Hope this helps.
Cheers,
Jonathan
Thanks Jonathan, I meant in the longer term, 6-12 months.
Hi Rob!
We appreciate your follow-up.
Currently, there are multiple factors that need to be considered and due to the volatility of these factors, it is a bit hard to conclude whether they’ll leave the rates unchanged for the next few months or not.
If you have further inquiries, you may contact:
Media and Communications
Secretary’s Department
Reserve Bank of Australia
SYDNEY
Phone: +61 2 9551 9720
Fax: +61 2 9551 8033
Email: rbainfo@rba.gov.au
Hope this helps.
Cheers,
Jonathan
When do you think the RBA will start raising rates?
Hi Julie,
Thank you for contacting finder.com.au we are a financial comparison website and general information service.
It is hard to predict the movement of the cash rate as it is based on a multitude of factors that are continually changing however 7 out of the 38 experts we surveyed in our latest RBA survey for September 2016 said they predict it will start going up in July 2017 or beyond.
Regards
Jodie