The Reserve Bank of Australia (RBA) announced a reduction in the cash rate from 4.35% to 4.10%. This marks the first rate cut since 2020!
The move was widely anticipated, as annual inflation dropped from 3.6% in the September 2024 quarter to 3.2% in December, bringing it closer to the RBA’s target range of 2-3%. The full statement from the RBA is available to read here.
Lenders typically follow the RBA’s lead on cash rate decision, and major lenders like Westpac, NAB, Commonwealth Bank and ANZ have already announced reductions to their variable rate products, passing on the full 0.25% reduction. This means potential borrowers can now access more funds.
With the market shifting, now could be an excellent time to explore your options. Some lenders may offer more competitive rate adjustments than others, so it’s worth discussing your situation with a mortgage broker.
Looking ahead, there is potential for further rate cuts in 2025, depending on movements in inflation, unemployment, and the broader economy.
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