Australia’s home loan mortgage holders received a welcome boost today with the RBA announcing a cut to the official cash rate – taking it down to 3.85%.
While it wasn’t the ‘super-sized’ 0.5% drop some analysts had speculated, today’s reduction still offers relief for households juggling mortgage repayments and cost-of-living pressures.
Today’s lowering marks the second reduction in three months, pushing the official rate below 4.0% for the first time since May 2023.
March quarter inflation data suggests it may finally be under control. Let’s see – it is a volatile world.
‘Data on inflation for the March quarter provided further evidence that inflation continues to ease,’ confirmed the RBA today.
‘At 2.9 per cent, annual trimmed mean inflation was below 3 per cent for the first time since 2021 and headline inflation, at 2.4 per cent, remained within the target band of 2–3 per cent.”
However, the RBA predicts a rise over the coming year, though underlying inflation is now expected to be ‘around the midpoint of the 2–3 per cent range throughout much of the forecast period.’
There’s further good news with lenders fuelling a competitive market.
Bank Australia dropped its three-year fixed Clean Energy Home Loan rate by 0.20%, now sitting at 4.94% – the lowest fixed rate currently listed in the influential Canstar database, though it applies only to green builds and purchases.
Macquarie Bank followed, lowering its two- and three-year fixed rates to 5.19%, reclaiming the lowest general fixed rate on offer. Aussie Home Loans went further, slashing some fixed rates by 0.50%, signalling deeper cuts could be on the way.
Commonwealth Bank cut its variable rate ahead of the RBA decision, now down to 5.84%. Westpac and ANZ have also moved their variable rates lower.
In total, around 35 lenders – including Mortgage House, People’s Choice, and Pacific Mortgage Group – now offer variable rates below 5.75%.
For many borrowers the decision, if passed on, could reduce monthly mortgage repayments by $90 to $150 – depending on the size and structure of their loans.
Still, global tariff tensions could weigh on future RBA rate decisions.
‘‘While recent announcements on tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries,” noted the Central Bank.
If you would like to review your home loan arrangements, contact Mortgage Broker Group.
We can assist with tips on how to uncover lower rates, boost your savings, consolidate other debts, and take the pressure off increases in household prices.
Mortgage Broker Group operates nationwide, and our service is 100% free to you (although your lender will likely apply their normal fees and charges to any loan you take out).