What does it mean when the RBA puts the official cash rate on hold?

Rates and fees last updated on

How you should respond when the RBA leaves the cash rate on hold RBA Cash rate unchanged

The Reserve Bank of Australia (RBA) is responsible for managing the country’s monetary policy. With an aim to maintain price stability, low levels of unemployment and consumer confidence, the RBA is responsible for setting the interest rate on overnight loans to commercial banks.

This rate is known as the official cash rate and it affects other interest rates across the financial sector, influencing the actions of lenders and borrowers and impacting on the health of the economy as a whole.

How does the RBA come to a 'no change' decision?

With the exception of January, the RBA board meets on the first Tuesday of every month to discuss monetary policy and to set the official cash rate. The board examines factors such as financial markets, economic conditions in Australia and around the world, and the considerations for monetary policy.

After assessing each of these important areas, the board will then decide what the cash rate target should be in order to satisfy its monetary policy goals. So on the first Tuesday afternoon of the month, the RBA’s governor announces whether the official cash rate will rise, fall or remain the same.

If you hear news that the cash rate is on hold, this means that the RBA board has decided to leave the rate unchanged. There are many reasons why the RBA can decide to leave the rate at its current level, such as if the economy is performing at a suitable level and inflation is within target, or if the RBA is waiting for the effects of previous rate changes to filter through the economy as a whole.

For example, when the decision was made to leave the rate unchanged in March 2015, the board was influenced by factors such as slower than expected growth, an undervalued currency and a high unemployment rate.

Preparing for a rate change

Just because the cash rate may have remained unchanged recently, it doesn’t mean you should expect it to stay in the same place in the future. Here at finder.com.au, every month we ask our resident rate experts to predict what the RBA’s next decision on the cash rate will be. Staying up to date with these expert forecasts can ensure that you are fully prepared for when the rate does rise or fall in future.

There are also several steps you can take to minimise the impact a rate change has on your personal finances, including:

  • Making extra home loan repayments. If your loan allows you to make extra repayments ahead of time, doing so is a great idea. Not only will this reduce the amount of debt you have, but it’ll also minimise the outstanding balance on which you have to pay interest, should interest rates rise.
  • Pay off your credit card debt. When rates look set to rise, working to pay off as much of your credit card balance as possible is also a good move. With less owing on your card, there’s a smaller amount on which you’ll have to pay interest.
  • Consider refinancing and debt consolidation. If you’re worried that a predicted change in the cash rate could have a negative effect on your financial situation, now is a good time to assess your options. If you think you’ll struggle to continue to make home loan repayments, perhaps you need to look into refinancing. If you have multiple repayments you need to manage for several different debts, looking at consolidating all your debt into one loan and one regular repayment could save you a whole lot of money and stress.
  • Lock in a rate. If you need a home loan and you think now is the best time to find a great rate, consider taking out a fixed rate loan and locking in an attractive interest rate for a set period. The same applies with savings accounts - if you think interest rates will drop and your savings balance will suffer as a result, consider locking away some of your funds in a term deposit to take advantage of higher interest rates while you can.
  • Find a home loan with an offset account. Home loans with offset accounts allow you to reduce the amount of interest you pay. This can help protect you when the RBA raises the official cash rate.

Has the RBA left the cash rate on hold? Compare refinancing home loans

Rates last updated December 18th, 2017
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Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.69%
4.86%
$0
$395 p.a.
90%
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.64%
3.66%
$0
$0 p.a.
80%
A basic home loan with a competitive rate and low fees.
3.58%
3.59%
$0
$0 p.a.
80%
A competitive variable rate product with low fees offered by a 100% online lender.
3.62%
3.62%
$0
$0 p.a.
80%
A discounted, competitive variable rate loan with limited fees.
3.64%
3.67%
$0
$0 p.a.
80%
A home loan with a competitive variable rate, limited fees and plenty of flexibility.
3.64%
3.67%
$0
$0 p.a.
80%
A low rate home loan with no ongoing fees.
3.54%
3.56%
$0
$0 p.a.
80%
For new home buyers only. No refinance option. A low interest variable home loan with no application fee and free redraws. Offer ends 2 January.
3.65%
3.66%
$0
$0 p.a.
90%
A competitive variable rate home loan with no application fee.
3.69%
3.69%
$0
$0 p.a.
90%
A special limited time offer for owner occupiers. An IMB Transaction Account must be opened with this loan.
3.99%
4.62%
$395
$0 p.a.
80%
Fix your interest rate and pay principal and interest repayments on your investment.
3.69%
4.01%
$0
$299 p.a.
95%
A loan with no application fee and borrow up to 95% LVR.
4.14%
4.14%
$0
$0 p.a.
80%
An investment home loan with competitive rate and 100% offset account.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application fee or ongoing fees with this loan.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
A low interest rate home loan that allows borrowers to borrow up to 80% of the property value.
3.78%
3.78%
$0
$0 p.a.
80%
A basic low-rate home loan that still offers some useful features.
4.64%
4.01%
$0
$0 p.a.
80%
Enjoy a fast application process and flexible repayment options with this fixed rate investment loan.
4.09%
4.11%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
4.79%
5.44%
$0
$395 p.a.
90%
Package your 4-year fixed rate investment loan and pay no application fees.
3.99%
4.00%
$0
$0 p.a.
80%
A low-fee variable rate investor loan with a fast online application process.
3.64%
4.03%
$0
$395 p.a.
80%
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.65%
4.84%
$0
$395 p.a.
90%
A 2 years fixed platinum package that has $0 application and a loan redraw facility.
3.65%
4.19%
$500
$0 p.a.
95%
Get a discounted fixed interest rate for the first 12 months while you settle into your new loan.
3.79%
4.11%
$0
$299 p.a.
80%
A fully featured home loan with an offset account and discounts available.
3.72%
3.74%
$0
$0 p.a.
80%
Take advantage of a 100% offset account along with no annual or application fees.
3.71%
3.74%
$600
$0 p.a.
80%
A maximum 80% LVR home loan with no ongoing service fees and a linked transaction account.
3.94%
4.88%
$0
$0 p.a.
90%
Enjoy a low interest rate and borrow up to 90% (with LMI) of your property's value.
3.69%
4.15%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
3.97%
4.02%
$445
$0 p.a.
90%
Get a competitive rate without features you may not use.
3.99%
4.02%
$600
$0 p.a.
90%
Take advantage of a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
4.09%
4.11%
$0
$0 p.a.
80%
A low variable rate loan with no application or ongoing fees.
3.85%
4.18%
$500
$0 p.a.
95%
Apply for Easy Street fixed rate home loans and get a competitive loan with a fixed interest rate.
3.96%
3.98%
$0
$0 p.a.
90%
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.72%
4.19%
$0
$0 p.a.
80%
Enjoy a variable 3 year introductory rate with the Bankwest Equaliser Home Loan.
3.84%
4.83%
$0
$0 p.a.
95%
Get a competitive 2-year fixed rate with no application or ongoing fees.
3.88%
4.89%
$0
$395 p.a.
95%
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.04%
4.07%
$0
$0 p.a.
80%
Access the equity in your home with a competitive interest-only rate and no application fee.
3.97%
3.97%
$0
$0 p.a.
90%
A competitive variable rate home loan with no ongoing fees.
3.64%
3.64%
$0
$0 p.a.
70%
A low-rate basic home loan requiring a 30% deposit.
3.73%
3.73%
$0
$0 p.a.
70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
$0
$0 p.a.
A basic low-rate home loan that still offers some useful features.
3.74%
3.74%
$0
$0 p.a.
95%
A low rate home loan with no application or ongoing fees. Loan comes with 1 year of free home and contents insurance. Note that to be eligible for this loan you must be QLD resident.
4.19%
4.19%
$0
$0 p.a.
90%
Access to redraw facility and offset account without the annual fee.
3.68%
3.69%
$0
$0 p.a.
95%
A no frills loan with a competitive rate and a maximum LVR of 95%.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
A competitive variable rate home loan with flexible features. You can earn 30,000 Velocity Points for every $100k you borrow (for a limited time, subject to eligibility requirements).
3.87%
3.92%
$0
$0 p.a.
90%
A low rate variable home loan offer with no monthly fees or application fee charge.
3.87%
3.87%
$0
$10 monthly ($120 p.a.)
90%
Get a competitive interest rate for 3 years and a discounted variable rate when the fixed period ends.
3.69%
3.69%
$0
$0 p.a.
70%
Enjoy a low variable rate with no application and ongoing fees.
3.79%
3.80%
$0
$0 p.a.
80%
A competitive rate with no ongoing monthly fees or application fees.
3.99%
4.03%
$0
$0 p.a.
95%
Enjoy a basic home loan with a high LVR and no application or ongoing fees.
3.85%
4.95%
$0
$395 p.a.
95%
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cashback available for refinancers. Conditions apply.
3.99%
4.99%
$0
$395 p.a.
95%
A package home loan with fee free extra repayments available during the fixed term.
4.39%
5.42%
$300
$10 monthly ($120 p.a.)
95%
Lock in a competitive fixed rate for 3 years.
3.69%
4.03%
$0
$299 p.a.
80%
Enjoy a low variable rate with no application fee.
3.59%
4.42%
$0
$0 p.a.
95%
This competitive introductory rate is a limited time offer for new owner-occupiers
3.68%
3.69%
$600
$0 p.a.
90%
Get a low variable rate along with some important basic features.

Compare up to 4 providers

Shirley Liu

Shirley Liu is a program manager at finder, formerly the publisher for Banking and Investments. She is passionate about helping people make an informed decision, save money and find the best deal for their needs.

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