RBA cash rate

The cash rate is Australia's official interest rate which is currently held at a target of 0.10% by the Reserve Bank of Australia (RBA). It has remained at this rate since March 2020, with the RBA indicating it is unlikely to lift it until annual inflation is within the 2-3% target range.

The cash rate 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
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
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

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

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

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

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEES

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

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEES

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

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 17, 2022. 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 average home loan interest rates have changed since July 2019.

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.

Latest RBA News

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.