Banking recap: RBA keeps rates on hold, home values and household spending lift

Thanks for joining us on the live blog this week – here’s the highlights of what you might have missed:

The RBA held the cash rate at 4.10%

The biggest news of the week was that the Reserve Bank decided to keep the cash rate on hold at its April meeting, staying at 4.10%.

The decision was widely expected, with the Big Four banks and the majority of market commentators accurately predicting the rate call.

The decision comes as inflation cools from its peak in 2022, but there is still potential for underlying inflationary pressures in areas such as housing, leading to the RBA’s decision.

Read more about the Reserve Bank’s rate decision.

Savings interest rates on hold – at least for now

We’ve seen many interest rates on savings accounts drop since the Reserve Bank’s February decision, with the average savings rate sitting at 3.39% p.a. according to the Mozo database.

The key question for us this week was, should we expect these savings interest rates to drop even further?

Our finance expert, Peter Marshall, said that he would expect most at-call savings rates to stay where they are for now, at least until the next RBA move.

“However, some will adjust their competitiveness in the market depending on how much they need to (or don’t need to) raise funds to enable further lending,” said Marshall. 

“For example, Ubank has already cut its headline savings rate twice since the last RBA meeting, although its rate is still reasonably good.”

Housing values see positive gains

Australian home values saw a lift of 0.3% in February, followed by an increase of 0.4% in March according to property data analysts, CoreLogic.

The month-on-month growth comes after the cash rate’s 25 basis point cut, from 4.35% to 4.10% in February, which could have played a part in the uptick.

CoreLogic’s research suggests the cash rate is “likely” to come down further this year, though it will be gradual. If core inflation remains within the RBA’s target band of 2-3% – a second rate cut is “highly probable”.

Household spending lifts

The Australian Bureau of Statistics (ABS) reported a slight increase of 0.2% to household spending in February.

It’s the fifth consecutive month that household spending has climbed, and it’s now 3.3% higher than one year ago.

What’s spurring on household spending?

The head of business statistics at the ABS, Robert Ewing, says recreational and cultural activities, purchases of new vehicles and eating out have all contributed to the rise in discretionary spending.

Thanks for joining us today – have a lovely weekend and we’ll be back with more interest rate coverage next week.

The Reserve Bank of Australia (RBA) left the cash rate at 4.10% at its April meeting, but we wanted to see how home loans are tracking in the time since the February cut.

We’ve seen a shift in the average variable rate† in the Mozo database – it went from 6.72% p.a. in early February prior to the Reserve Bank’s first meeting of the year, and has since fallen to 6.44% p.a. on 4 April, 2025.

Better still, a look at some of the best home loans in our database shows that there are plenty of options available that start with a ‘5’, so it’s worthwhile seeing if you can secure a better rate than the average.

See the table below for the top five variable rates in our database at the time of writing.

† Source: Mozo database. Average variable home loan rates for a $400,000 loan with principal and interest repayments and 80% LVR. Averages on 10 February vs 4 April, 2025.

Police Bank has sliced 0.50% off its two-year fixed rate home loans, bringing the interest rate down to 5.49% p.a. (5.97% p.a. comparison rate*).

The new rate brings Police Bank closer to some of the best fixed rate home loans in our database, the lowest of which comes courtesy of Australian Mutual Bank at 5.29% p.a. (6.05% p.a. comparison rate*). However, this rate is only available to first home buyers.

Police Bank’s home loans come with a caveat of their own, as they’re only available to current and retired employees of an Australian police force.

If you’re looking for a two-year fixed home loan that is open to anyone, the lowest in our database is Australian Mutual Bank’s Fixed Rate Home Loan at 5.39% p.a. (6.11% p.a. comparison rate*).

Household spending rose slightly in February (0.2%), according to seasonally adjusted figures released today by the Australian Bureau of Statistics (ABS).

This follows a 0.5 per cent rise in January and a 0.2% rise in December.

ABS head of business statistics, Robert Ewing says that household spending climbed for the fifth month in a row in February, to be 3.3% higher than a year ago.

"Spending on recreational and cultural activities, purchases of new vehicles and eating out contributed to a 0.3% rise in discretionary spending," Ewing said. 

Health (+7.8%) and recreation and culture (+5.1%) made the largest contributions to this rise. 

"In contrast, spending on non-discretionary goods and services fell by 0.1 per cent, following a 1.7 per cent rise in January. Households reduced their spending on health, particularly doctor and hospital visits, while increasing their spending on Food."

Services spending was 5.2% higher than February 2024, while goods spending was up 1.7%. 

Household spending grew in five of the eight states and territories, the ABS said.

The highest percentage rises were seen in the Northern Territory (+0.5%), New South Wales (+0.4%) and Tasmania (+0.4%), while the Australian Capital Territory (-0.6%) had the largest fall.

With the cost of living still high, it's important to budget and save where you can. At Mozo we help savers find the top savings rates using our savings accounts database. Start comparing!

Financial markets have significantly increased their expectations for rate cuts following the Trump administration's new reciprocal tariffs regime. 

Traders now price in an 82% chance of a May rate cut by the Reserve Bank of Australia, up from 70% before the tariff announcement, with 3-4 total cuts anticipated for 2025, as reported by the Australian Financial Review this morning. 

The RBA's latest financial stability review warns that US tariffs and potential retaliatory measures pose a "risk to the global economy."

As Morningstar analysts note, the economic impact depends largely on how tariff revenue is handled. If recycled as tax cuts, it could reduce recession risk but wouldn't eliminate efficiency losses. 

However, mounting uncertainty among businesses and consumers may suppress spending regardless, potentially making the shock more recessionary than inflationary.

Without accompanying tax cuts, tariffs would likely necessitate more aggressive interest rate cuts. Conversely, if the tariff shock proves more inflationary, central banks might be forced to delay planned rate reductions. 

This will clearly be a hot topic for Aussie home owners and savers in the weeks to come. 

Be sure to check our interest rate tracker for more.

Good morning and welcome back to our live news blog!

In positive news for prospective property buyers this autumn, total nationwide residential property listings increased by 1% over the month of March 2025, reaching 251,605 listed properties, SQM Research said.

There was a monthly increase in listings across most major cities and that means potentially more options ahead of the typically busy pre-Easter season. 

Perth leads the way, recording the highest monthly rise at 6.3% and a 5.3% yearly increase, with listings reaching 16,080. 

Sydney saw a monthly rise of 4.3%, with listings reaching 34,686, 5.7% higher than the same time last year. 

Melbourne recorded a slight increase of 1.0% month-on-month, bringing total listings to 40,357, reflecting a 2.3% yearly decline. 

Adelaide recorded a 3.1% monthly increase and a yearly decline of 7.3%.

Hobart saw monthly and yearly gains of 2.4% and 4.2% respectively. 

Canberra posted a strong yearly growth of 11.4%, and a 0.6.% monthly increase in listings. 

Brisbane is down a bit, seeing a decline of 0.8% compared to February and 9.8% yearly decline. 

While auction numbers have eased week on week, as per Corelogic, it should be noted that auctions have picked up significantly on the same time last year (up 21%).

Many buyers will look beyond auctions as well, hoping to snag a purchase privately.

If you're in the market for a home, it's probably time to do some home loan research. Here at Mozo we compare some of the leading rates in our database for you to start with.