RBA cash rate

The cash rate is Australia's official interest rate and is determined by the Reserve Bank of Australia in a board meeting every month (excluding January). This rate is the rate charged on loans between financial institutions (like banks), and it has a significant impact on the price of financial products.

In Australia, a high RBA cash rate has historically resulted in high interest rates on home loans, car loans, personal loans, savings accountsterm deposits and so on. Likewise, a low cash rate results in low interest rates on these products, which is good for borrowers but not for savers.

As things stand, Australia's current cash rate is 0.10%, which is a historic low. The infographic below displays the recent history of Australia's cash rate, which you can also find on the RBA's website.

If you don't want to get stuck with a high-rate home loan, check out a collection of some of the lowest-rated home loans on the market in our table below.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
WIN YOUR HOME LOAN INTEREST FREE

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • WIN your home loan interest free and save up to $1.1 million. Refinance by 29 October. T&Cs apply.
  • Refinance Only. Fast online application, refinance in minutes, not weeks.
  • No Nano fees, Free 100% offset sub account. Mobile app. Visa debit card & instant payments.
WIN YOUR HOME LOAN INTEREST FREE

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • WIN your home loan interest free and save up to $1.1 million. Refinance by 29 October. T&Cs apply.
  • Refinance Only. Fast online application, refinance in minutes, not weeks.
  • No Nano fees, Free 100% offset sub account. Mobile app. Visa debit card & instant payments.
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Rates correct as of September 25, 2021. View disclaimer.

Current home loan interest rates 2021

Home loan rates are closely tied to the cash rate - the lower the cash rate, the lower home loan rates will go as lenders fight and scrape to offer the most competitive rates on the market. The infographic below displays how the following home loan rates have changed since the Reserve Bank started recording home loan rates in 2015.

Other home loan products:

Getting a low home loan interest rate is extremely important. Homes cost hundreds of thousands of dollars, which is likely to be the biggest expense of your life by far. Even a cheap home loan will still rack up interest costs of over a hundred thousand dollars over the life of the loan, so it's imperative you don't just pick the first home loan you see. For a variable owner-occupied home loan (P&I), there are home loan rates available below 2.00% p.a, while at the other end of the scale you can get a home loan in excess of 5.00% p.a.

Current savings account interest rates 2021

Savings accounts are typically separate to your everyday bank account, aka a transaction account. When you open a bank account you should have both - the transaction account to make payments with, and the savings account to earn interest.

The interest rate on your savings account can help you earn a little bit extra on the money you've earned. Say you deposit $10,000 worth of savings in an account that pays 2.00% p.a: after one year you'd have earned a little bit more than $200 (thanks to the magic of compound interest).

However, you're unlikely to find a 2.00% p.a interest rate at the moment. Savings account interest rates are at historic lows thanks to the also historically low cash rate. The highest the average customer can get is closer to 1.00% p.a, while the average savings account from the big four banks is below 0.50% p.a. 

Types of savings accounts:

To find a good savings account interest rate, check out our table below that shows some of the highest interest rates available.

Current term deposit interest rates 2021

Term deposits are a similar beast to savings accounts except the money is typically locked away for the duration of the term, whereas funds in a savings account should be able to be withdrawn at any time. Also, the interest rate on a term deposit is fixed for the whole term (like a fixed-rate home loan), while a savings account's interest rate could be raised or cut several times a year (like a variable-rate home loan).

Term deposits are offering similar interest rates to savings accounts at the moment as they too are closely linked to the cash rate. The average deposit rate from the big four banks is currently just 0.30% p.a.

Looking across the broader market, the average rate for term deposits across the market is  less than 0.50% p.a. The average rates for the different term deposit terms can be seen in the infographic below, with longer terms generally attracting higher interest rates.

Different deposit terms:

There are term deposit rates on the market thigher than these averages though, and you should endeavour to find one. The table below displays some of the highest term deppsit rates available for a one-year term.

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.