This was widely in-line with market expectations, with the Reserve Bank (RBA) reticent to raise the cash rate until inflation and wage growth are 'sustainably' at 2-3%, even though wage growth has not been above 3% in more than eight years.

However, in the Sydney Morning Herald and The Age's 'SCOPE' survey of 23 of the nation's leading economists, two believe there could be a rate rise as soon as late 2022.

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.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured 4.6 Star Customer Ratings
  • No monthly or ongoing fees
  • Unlimited free redraw
  • No application fee
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.09% p.a.
6.11% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

In his statement today, RBA Governor Dr Philip Lowe said the low rates are helping boost the economy.

"The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range. For this to occur, wages growth will have to be materially higher than it is currently," he said.

"This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest."

House prices and low interest rates

The topic on everyday Australians' lips recently has been house prices, which in February recorded their strongest performance in 17 years.

Mortgage sizes too continue to grow, growing by more than $4,000 in just a month, now at an average of $481,790 for owner occupiers.

Mortgage Choice CEO Susan Mitchell said there is a 'fear of missing out' sentiment permeating the housing market.

“Customers are taking advantage of extra sharp fixed rates in the market with almost half of [our] home loan applications in February including a fixed portion of the mortgage," she said.

"Despite no change to the cash rate today, my advice to borrowers remains the same. Speak to an experienced mortgage broker to see if you’re still getting a good deal on your home loan."

However, AMP chief economist Shane Oliver said low rates pose "mid-to-long term risks for the housing market".

"The RBA is fixated on generating inflation in the economy, which could take some time, but by 2023 rate hikes could again be on the table," he said.

"Even if they remain low by historical standards, any rise will represent a deterioration in current conditions and is likely to affect affordability. If that were to persist, the expensiveness of our residential property market might finally start to hit home with potential buyers.

"The good news is that the RBA has acknowledged an excessive heating up of the property market in the near term as a concern, but not a pressing one."

There is also concern winding back the JobSeeker 'coronavirus supplement' and JobKeeper later this month poses risks for the housing market.

Westpac chief economist Bill Evans says a bigger concern for the Reserve Bank at the moment is bond yields, which have been rising in recent weeks, off the back of RBA purchasing programs and quantitative easing.

"Readers will be aware that bond rates have 'taken off' ...  what is not clear is how much of this sharp increase in near term bond and swap rates is due to a significant reassessment of the outlook for monetary policy and how much is the impact of rising long rates by lifting the shorter end of the curve," he said.

"Clearly for the Bank to make a credible case that it expects conditions for the first-rate hike to be reached by mid-2024 ... it will have to be significantly lifting its forecasts for wages and inflation growth out to December 2023 in the August SOMP [Statement of Monetary Policy]."

See Also: What is a Housing Bubble, and is Australia in One?

RBA Governor Dr Philip Lowe at Crawford Forum, 2017. Photo by Crawford Forum on Flickr.

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