It’s happening! RBA actually cuts the cash rate this month
The RBA… *double checks website* yes, the RBA does actually cut the cash rate this month.
After a disappointing cash rate decision last month, the Reserve Bank of Australia (RBA) has finally given Aussie home loan borrowers the news we've all been waiting for.
The board has announced it's cutting the cash rate by 0.25%. The new rate sits at 3.60%.
This was widely expected by experts and economists. (Although, it was widely expected in July too and look what happened there.)
According to a Finder survey, 91% of our panel believed the rate would cut this month.
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What's different about this month?
A good question, because it might not seem like much. But over the last month the RBA board has had further figures on inflation, showing it's still in the target range of 2-3%.
If you feel like you've got déjà vu, then yes we've been in that band for some time. But the RBA has wanted to keep a very close eye on how inflation moves as rates fall, lest we spiral back up above 3% and undo all our hard work.
There's also been a slight uptick in unemployment levels, which is another factor the RBA considers when deciding whether it should cut the cash rate.
Now that that excitement is over…
It's not over yet! Yes, the RBA decision is exciting. But it doesn't stop there. Because now we know the cash rate has been cut, we'll start getting announcements from lenders about what impact that has on their own interest rates.
Typically, lenders will change their rates in line with the RBA. Some of these announcements are probably landing in our inboxes as we speak, while others will filter through over the rest of the week.
The thing to note is that the more the RBA cuts the cash rate, the less likely lenders are to cut their rates. Or instead of passing on the full 0.25% cut, they might only pass on 0.10%.
So the excitement continues as we wait to see what they do.
RBA rate cut: What's your bank doing?
We're tracking every lender as they announce changes.
If you have a home loan, you should keep a keen eye on what your lender does. If you're not happy with your rate, there are plenty of lenders out there who will be cutting and welcoming refinancers.
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