Reserve Bank leaves rate untouched.

March 03, 2015
Melissa McCullock

3 March 2015


RBA leaves cash rate untouched

Stable cash rate the best course of action for now


Steady dwelling value growth combined with a strong rebound in consumer confidence has encouraged the Reserve Bank of Australia to leave the cash rate on hold today.

At today’s Board meeting, the Reserve Bank judged it was prudent to leave the cash rate alone this month following last month’s decision to cut the cash rate to the historical low of 2.25 per cent.

“When the Reserve Bank cut the cash rate last month, many of Australia’s lenders followed suit, passing on the full rate cut to their borrowers,” Mortgage Choice Mark Ferris said.

“These rate cuts are only just now starting to come into effect, so the Reserve Bank has obviously decided to take a wait and see approach to rates to see how the latest rate cut plays out and what impact it has on the property market as well as the broader economy.”

“The Reserve Bank would have also been encouraged to leave rates on hold this month as new data from the Westpac Melbourne Institute of Consumer Sentiment shows confidence enjoyed an 8 per cent spike following the rate cut.

“This dramatic improvement in confidence means the number of optimists now outweighs the number of pessimists for the first time in 12 months.”

In addition to the improvement in confidence, new research from RP Data shows dwelling values continue to climb at a steady rate.

According to CoreLogic RP Data’s February Home Value Index results, Australia’s combined capital cities enjoyed a 0.3 per cent spike in dwelling values over the course of February, taking home values 8.3 per cent higher over the past 12 months.

“While property values continue to climb, they are doing so at a much more moderate pace than previously recorded, which would provide the Reserve bank with confidence that their February rate cut won’t necessarily propel the rate of home value growth as many might have expected it would,” Mr Ferris said.  

But while rates were left on hold this month, Mr Ferris warned that this doesn’t mean the country has entered into another prolonged period of interest rate stability.

“The Reserve Bank has made it very clear that they will cut the cash rate again in the not-too-distant future if the need arises. With that in mind, it is likely that the Reserve Bank will continue to keep a close eye on the economy, including the property market, business and consumer confidence, inflation as well as the rate of unemployment,” he said.

“Many of Australia’s leading economists believe the Reserve Bank will look to cut the cash rate again before the end of the financial year. If that does happen, we can expect home loan rates to fall further, which may or may not cause home values to grow.

“In the meantime however, it really is a case of ‘watch this space’.”


If you want to learn more about your home loan options, call us on 08 9291 8874 or visit

For further information, photos of the new logo, or to arrange an interview, please contact:

Mark Ferris

Mortgage Choice

0411 594 655



Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.


About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.
Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by
offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.
Since that time, the company has grown and developed into a fully fledged financial services provider.
Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset
finance, deposit bonds, and risk and general insurance.
Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified
financial advisers.
Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It
listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).
Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited
holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.
Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian
Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/
Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser
magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards
Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010
Forbes Asia-Pacific Best Under A Billion list.
Visit or call customer service on 13 77 62.


Posted in: Interest rates

Contact us today.

Additional Comments? * :