💸 How the RBA rate cut can boost your super – and even buy your first home

Rate cuts help your long-term future - here's how to take advantage.

The Reserve Bank of Australia (RBA) has cut the official cash rate from 4.1% to 3.85%, bringing a wave of relief to households around the country. While not as big a rate cut as expected, it creates an opportunity to boost your super – especially if you’re working towards buying your first home.

How does the rate cut affect your finances?

The change to interest rates flows through the economy in a few key ways. Here’s what it could mean for your money:

1. Savings rates may drop

Currently, many high-interest savings accounts are offering rates around 5%. These are expected to decrease in line with the RBA’s cut, although some providers may hold steady in the short term. If you’re saving in a standard bank account, now might be a good time to shop around for the best rates.

2. Home loan repayments may ease

For homeowners, the rate cut could translate to lower monthly repayments – provided their lender passes it on. With household budgets under pressure, this reduction may offer some much-needed breathing space.

Renters are unlikely to see an immediate benefit, although easing rate pressure may eventually take some heat out of the cost-of-living crisis.

3. Now could be a great time to top up your super

If your budget gets a little easier thanks to lower mortgage repayments, you could consider channelling some of that cash into boosting your superannuation.

There are two main ways to do this:

• Personal contributions (after-tax): Set up a regular direct debit to your super account, timed with your payday. Even a small, consistent amount can grow significantly over time.
• Salary sacrifice (pre-tax): Diverting even $50 a week – the cost of a few takeaway lunches – into your super could deliver thousands in additional savings by retirement. Salary sacrifice also lowers your taxable income, which means you could end up paying less tax overall.

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Want to buy a home? Super could help you save faster

With home ownership feeling out of reach - although now a little closer with the rate cut - many Australians are turning to the First Home Super Saver (FHSS) Scheme as a smarter way to build a deposit.

The scheme lets you make voluntary contributions to your super and later withdraw up to $50,000 to use for your first home. Why is this worth considering? The tax benefits alone can help you reach your savings goal sooner.

Let’s compare how savings stack up in your super vs a bank account:

*Assumes a mid-range marginal tax rate
**Some super funds returned over 10% p.a. over the last three years, according to Finder's super fund comparator

That means not only are you saving on tax, but your money may be working harder inside super than it would in a regular savings account.

To explore how much faster you could reach your goal, REST Super offers a free FHSS calculator. You simply enter your income and savings amount to see how your savings would grow under the scheme.

✅ Tip: Check whether your super fund supports the FHSS Scheme before you get started.

The bottom line

With the interest rate cut, this could be a perfect time to give your super a boost – whether you’re building wealth for retirement or trying to crack into the property market. A few smart moves today could translate into serious gains for your future self.

Disclaimer - This information is general and does not take into account your individual objectives, financial situation or needs. Before making any financial decision, consider your own situation and seek independent expert advice.