RBA Cuts Interest Rates – What Does It Mean for You and the Housing Market?
Q: What did the Reserve Bank decide in August?
The Reserve Bank of Australia (RBA) cut the cash rate by 0.25% to 3.6%.
Q: How will this affect my mortgage repayments?
If you have a $600,000 mortgage, your monthly repayments could drop by about $89 — if your bank passes on the full cut.
Q: What interest rates can I expect now?
- Typical owner-occupier variable rate: around 5.54%
- Lowest big four bank variable rate: around 5.34%
- Ultra-competitive lender rates: around 5.25%
Q: Will there be more rate cuts?
Banks have different predictions:
- Westpac: 4 cuts (August, November, February, May) – cash rate down to 2.85%
- NAB: 3 cuts (August, November, February) – cash rate down to 3.10%
- CBA & ANZ: 2 cuts (August, November) – cash rate down to 3.35%
Q: Why did the RBA cut rates now?
Unemployment has risen from 4.1% to 4.3%, and economic growth is slowing. Lower rates are aimed at helping households and boosting the economy.
Q: How will this affect the housing market?
- Borrowing power could increase by $4,000 for a single earning $50k, or $49,000 for a double-income household earning $400k.
- CBA expects property prices to rise 6% in 2025 and 4% in 2026.
- Smaller cities may grow faster: Brisbane +8%, Perth +7%, Adelaide +6%.
Q: Will prices keep rising like before?
Probably not as fast.
Even with rate cuts, slower migration, stretched affordability, and a smaller rate cut cycle could keep price growth moderate.