RBA leaves cash rate unchanged at 0.10% in June

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on June 01, 2021
RBA leaves cash rate unchanged at 0.10% in June

Today the Reserve Bank left the cash rate unchanged at 0.10%, for the seventh consecutive month.

RBA Governor Dr Philip Lowe has maintained that the cash rate will not change until wage growth and inflation are both 'comfortably' above the 2-3% threshold, with unemployment also improving.

"For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest," he said.

However, New Zealand's Reserve Bank (RBNZ) has signalled that it could raise its cash rate as early as mid-2022, pending more positive economic data.

CEO of digital lending platform 'WLTH' Brodie Haupt predicted the RBA will maintain its 2024 guidance on lifting the cash rate.

"Even with strong growth in the property market over the last few months, the RBA looks set to hold rates for the foreseeable future," he said.

"The RBA has continuously said that they won't be increasing the cash rate until inflation is back within the target range and with no sign of this at the moment, I can't see the rates lifting earlier than expected."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

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
ZERO APPLICATION FEESFEE FREE OFFSET

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 FEESFEE FREE OFFSET

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
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

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • 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

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • 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.

Rates correct as of January 25, 2022. View disclaimer.


APAC economist for jobs search site Indeed, Callam Pickering, explained the RBA's thinking behind maintaining the cash rate at 0.10%.

“Right now, the Australian economy is a mile away from justifying tighter monetary policy. The RBA hasn’t hit their inflation target in five-years, we haven’t had wage growth of 3% or higher in eight-years and the unemployment rate hasn’t been below 4.5% since 2008," he said.

Mortgage Choice CEO Susan Mitchell said today's rate decision was "unsurprising".

“Pleasingly, data from the Australian Bureau of Statistics (ABS) revealed that the unemployment rate continues on its downward trend, however, we’re a long way off seeing a marked improvement to wages growth," she said.

"There are signs the nation's economic recovery is on track but the latest lockdown in Victoria is a reminder that monetary and fiscal support will be required for some time yet."


Photo by Tim Bish on Unsplash

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.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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