RBA holds cash rate at 0.10% for September

author-avatar By on September 07, 2021
RBA holds cash rate at 0.10% for September

Australia's central bank has left the cash rate unchanged for the tenth consecutive month.

The decision was overwhelmingly expected by economists, with the Reserve Bank (RBA) announcing it would hold the rate at 0.10%. 

The last cash rate change was in November - the Board does not meet in January.

November's 'Melbourne Cup Cut' was a 15 basis point reduction from 0.25%, with the central bank stating the rate was now at its effective floor. 

RBA Governor Phillip Lowe announced the central bank's quantitative easing program would be extended until at least February 2022, in the face of Delta outbreaks halting the economic recovery. 

"The Board will continue to review the bond purchase program in light of economic conditions and the health situation, and their implications for the expected progress towards full employment and the inflation target," Dr Lowe said.

"These bond purchases, together with the low level of the cash rate, the yield target and the funding that has been provided under the Term Funding Facility, are providing substantial and ongoing support to the Australian economy."

He added the RBA was closely watching the continuing but tapered growth in the housing market. 

"Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors.

"Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained."

Chief executive of digital lending and payments platform WLTH, Brodie Haupt, said it would be at least two years until the cash rate was hiked.

"With New South Wales and Victoria still in lockdown, there are too many economic factors currently at play for the Reserve Bank to make a change and I can't see them changing the rates for the foreseeable future," Mr Haupt said.

"Even with talk of international travel resuming and increasing vaccination rates, I can't see the RBA changing the cash rate until late 2023 or early 2024."

Borrowers urged to review their home loan

Although the cash rate may not move for some years, Susan Mitchell, chief executive of Mortgage Choice, said the various Delta outbreaks had seen many borrowers rush to review their mortgages. 

“The uncertainty caused by the ongoing lockdowns is pushing borrowers to chase better deals on their home loan," Ms Mitchell said.

"Loan preference data is showing that borrowers are seeking certainty in their monthly home loan repayments.

"Mortgage Choice monthly approval data reveals a growing trend towards fixed rates, with the proportion of borrowers opting to fix part of their mortgage steadily increasing throughout 2021." 

Ms Mitchell urged borrowers who hadn't reviewed their home loan in over a year to survey the market. 

"The home loan market is very competitive, so you could be missing out on a better deal if you don’t shop around."


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

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

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  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
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Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

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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
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

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

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  • Mobile app, Visa debit card & instant payments
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Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

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  • Mobile app, Visa debit card & instant payments
VariableMore details
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Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

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  • 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%)

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  • Optional 100% offset can be added for $120 p.a.^
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Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
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Rates correct as of October 23, 2021. View disclaimer.


Photo by Steven Ungermann 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 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.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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