Minutes from the Reserve Bank's (RBA) October Monetary Policy Meeting revealed the Bank weighed up a cash rate cut but questioned the effectiveness in the current economic climate. 

"They [Board members] recognised that some parts of the transmission of easier monetary policy had been impaired as a result of the restrictions on activity in parts of the economy," they said.

"However, as the economy opens up, members considered it reasonable to expect that further monetary easing would gain more traction than had been the case earlier."

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

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
4.6 Star Customer Ratings
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
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.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
 Disclosure
5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Flexibility to split your loan with both fixed and variable rates
 Disclosure
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.

Important Information and Comparison Rate Warning

The RBA noted the effect a cash rate cut had on consumer confidence and would likely cause further cuts to already abysmal savings account rates. 

"Members also considered the effect of lower interest rates on community confidence and on those people who rely on interest income." 

Speculation has been rife the central bank will cut the rate to a new record low of 0.10%, with economists from Westpac and NAB forecasting a cut at the November meeting. 

The central bank said further monetary easing was likely to bring about greater financial stability benefits from a stronger economy but noted the risks that came with this. 

"A further easing would help to reduce financial stability risks by strengthening the economy and private sector balance sheets, thereby lowering the number of non-performing loans.

"This benefit would need to be weighed against any additional risks as investors search for yield in the low interest rate environment, including those resulting from higher leverage and higher asset prices, particularly in the housing market.

The Board again ruled out negative interest rates and said the cash rate wouldn't be raised until progress was made towards full employment and inflation sat firmly in its desired 2-3% band. 

Overall the RBA said the Australian economy had performed well compared to global counterparts, with unemployment not set to reach the 10% mark they had previously forecasted. 

"Labour market conditions had improved somewhat over the preceding few months, with the unemployment rate likely to peak at a lower rate than earlier expected," it said. 

"Nevertheless, both unemployment and underemployment were expected to remain high for an extended period." 

The RBA said the record low cash rate had contributed to steady growth in owner-occupier lending but wary investors were yet to re-enter the market. 

"Commitments for housing loans to owner-occupiers had picked up further in August across all states, consistent with a general increase in activity in the housing market."

"By contrast, credit to investors in housing had remained weak, although it had stopped declining in August.

"Following an earlier tightening in response to the pandemic, more recently constraints on the supply of housing finance had eased slightly."



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