The Reserve Bank of Australia (RBA) maintained the cash rate at 4.10% in its monetary policy decision for July.

Here are the highlights from the RBA Governor Philip Lowe’s monetary policy decision statement:

  • The hold in July will provide some time for the RBA to assess the impact of the increase in interest rates and the economic outlook.
  • Inflation has passed its peak but still too high and will remain so for some time.
  • Growth in the Australian economy has slowed and conditions in the labour market have eased, although they remain very tight.
  • Labour force participation is at a record high and the unemployment rate remains close to a 50-year low.
  • Wages growth has picked up in response to the tight labour market and high inflation.
  • A significant source of uncertainty continues to be the outlook for household consumption.
  • The combination of higher interest rates and cost-of-living pressures is leading to a substantial slowing in household spending.
  • Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve.
  • The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.

CreditorWatch Anneke Thompson said the economic data released in June wasn't definitive enough to warrant a further increase in the cash rate.

“There is still concern about the very tight labour market and underlying inflation,” she said.

“Looking overseas, inflation in areas that are typically labour intensive is only decreasing very slowly, while price rises for goods are coming down faster — this is the same in Australia, where we recorded a decline of 0.4% in the price of clothing and footwear.”

Ms Thompson said the cycle is nearing a point where further rate rises will have limited effect.

“Households with a home loan have already endured the fastest and steepest rise to the cash rate in history, with most of these people unable to increase income enough to offset their higher interest repayments,” she said.

“The savings rate of Australians is now below pre-COVID levels, and COVID-era savings will have been exhausted already by many people.

For Ms Thompson, it is highly possible that households with a home loan have already pulled back substantially on their discretionary spending.

“The RBA will now be hoping businesses slow their hiring intentions, taking some pressure off wages and reducing inflation in labour-intensive parts of the economy,” she said.

Meanwhile, PropTrack senior economist Paul Ryan said the housing market appears to have shown “remarkable” resilience to the surge in interest rates over the past few months, even realising gains in June.

“Offsetting higher mortgage rates, strong buyer demand has been focused on a slower flow of new property listings and led to price increases,” he said.

“Forward indicators point to further home price growth in the months ahead. But continued higher interest rates remain a risk for the housing market — at some point, eroded borrowing capacities and weaker economic conditions brought about by higher interest rates may lead to price falls, as seen in 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.
$2,408
Principal & Interest
Variable
$0
$530
70%
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5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
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 .