RBA upgrades economic forecast in May meeting
The Reserve Bank of Australia kept official interest rates on hold at its monthly board meeting this afternoon. The cash rate currently sits at 0.1%, where it has remained since November 2020.
In his post meeting statement, RBA governor Philip Lowe outlined the Bank’s revised set of economic forecasts. It now expects GDP to grow by 4¾% over 2021 and 3½% over 2022.
“A pick-up in business investment is expected and household spending will be supported by the strengthening in balance sheets over the past year,” Lowe said.
“This recovery is especially evident in the strong growth in employment, with the unemployment rate falling further to 5.6 per cent in March and the number of people with a job now exceeding the pre-pandemic level.”
Lowe once again ruled out a tightening of monetary policy until the labour market recovers and inflation is sustainably within the 2 to 3% target band.
Any pressure to change course was eased last week, after consumer price index data for the March quarter saw headline inflation rise by just 0.6%. The annual rate of inflation also undershot expectations, increasing just 1.1%.
Underlying inflation has not been within the RBA’s target band since late 2015. Today, Lowe said he expects it to remain below the 2% mark until mid 2023.
Deputy RBA governor Guy Debelle will provide more insight into the Bank’s thinking on Thursday, ahead of the release of the RBA’s quarterly statement on monetary policy later in the week.
RELATED: May home loan snapshot: Longer term fixed rates are rising
Property values continue to climb, but the pace of growth has eased as of late. According to CoreLogic’s national home value index, prices rose by 1.8% in April, down from the 32-year high of 2.8% that was recorded in March.
While the lift in property values is welcome news for the RBA, CoreLogic research director Tim Lawless points out that younger Australians face mounting difficulties when saving to buy a home.
“With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households are finding it harder to save for a deposit and transactional costs,” he said.
Those hoping to secure a low rate on longer terms will also have to contend with rising fixed rates.
Following a trend we first observed in March, 15 lenders in the Mozo database increased rates for 4- or 5-year terms throughout April. The average 4-year fixed rate now sits at 2.46% p.a. (up 0.9% over the month).
Short-term fixed rates continue to move in the opposite direction. Notably, bcu reduced its 1-year fixed rates by 0.31%, bringing its owner occupier offering to 1.67% p.a. (3.85% p.a. comparison rate*).
For more information about mortgage and lending trends, head over to our home loan statistics page. And for an idea of where interest rates currently sit, visit our home loan comparison page.
Home loan comparisons on Mozo - last updated 20 April 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
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- Variable
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Mozo experts choice awards won:
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Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% p.a.Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
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Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
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- $10.00 monthly
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- $350.00
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- yes - free
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- yes - free
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- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
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- $3,000,000
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Read our Mozo Review to learn more about the Express Home Loan
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Flex Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 3 years6.37% p.a.Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
CompareCompareFlex Home Loan
Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.37% p.a.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.37% p.a.
- Upfront fees
- $250
- Ongoing fees
- $250.00 yearly
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- -
- maximum borrowing amount
- -
- type of mortgage
- Fixed
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- Owner Occupier
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- Weekly, Fortnightly, Monthly
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- -
Read our Mozo Review to learn more about the Flex Home Loan
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Discounted Home Value Loan
Owner Occupier, Principal & Interest, LVR 70-80%
interest rate
comparison rate
Initial monthly repayment6.09% p.a. variable6.09% p.a.Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
CompareCompareDiscounted Home Value Loan
Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $15,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Discounted Home Value Loan
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Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
CompareCompareNeat Home Loan
Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Upfront fees
- $250
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $80,000
- maximum borrowing amount
- $5,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Neat Home Loan
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