Cash Rate

The term cash rate, otherwise known as the official cash rate, is the interest rate set by The Reserve Bank of Australia (RBA) that banks then pay or charge to borrow funds from other banks in the overnight market. The RBA, which is Australiaa??s central bank, can then regulate the rate paid for cash by the sale or purchase of bonds. This sale process effects the supply of money, which then influences the interest rate set by the RBA. Financial institutions then follow suit and can make changes to their interest rates accordingly. Changes to the cash rate affect the economy as a whole especially the housing market because mortgage rates generally follow the cash rate.

If you are in the market for a low rate home loan, compare home loans online on our home loan page, or view the table below for a list of some of our best variable rate home loans from banks.