Great News for Borrowers: The RBA Announces First Rate Cut in Four Years!

Finally, some relief for mortgage holders! The Reserve Bank of Australia (RBA) has announced a long-awaited cash rate cut, lowering the rate by 25 basis points from 4.35 per cent to 4.1 per cent.

After 13 consecutive rate hikes since May 2022, this marks the first rate cut since November 2020. It signals the beginning of the first rate-easing cycle in four years.

So, what does this mean for mortgage holders? 
For the average home mortgage in Australia, which is approximately $640,000, monthly repayments will decrease by around $104 on a 30-year loan. Borrowers with smaller loans will see smaller reductions, while those with larger loans will benefit from greater reductions.

What can we expect next?
There are varying opinions in the market about what’s to come, with outcomes driven by factors like the Australian dollar, local economic conditions, and inflation. Most of the major banks predict further rate cuts throughout 2025, although there are differing views among industry specialists.

For those who are looking to buy, the rate announcement may improve your borrowing capacity. For those with existing mortgages, all the major banks (and most others) have already announced they are passing on the full rate cut, so these benefits will be passed onto your loans at their announced dates.

If you’re unsure how this affects you, reach out to our Finance Team who will help you explore your finance options:
E: finance@highview.com.au
T: 5990 1000

Your Full Financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.