Sweet relief: RBA cuts the cash rate to lowest in 2 years
Great news for those wanting a lower rate and first home buyers seeking more borrowing power.
The Reserve Bank of Australia (RBA) has cut the cash rate for the second time this year, offering some more welcome relief to Australian borrowers.
Announcing a cut of 0.25%, the RBA has set the cash rate at 3.85%. It was last at this rate in May 2023.
Borrowers now will be waiting to see how their lender responds, but it's important to remember that not every lender passes on rate cuts. Although lenders typically will pass on rate hikes (and quickly) we've seen in the past that not every cut is passed on or some are only partially passed on.
RBA second rate cut: What's your bank doing?
We're tracking every lender as they announce changes.
What the rate cuts mean for you
If you have a home loan, today's rate cut announcement could save you hundreds of dollars.
0.25% might not seem like a lot. But comparing 6% to 5.75% on a new 30 year loan of $500,000 shows you could pay $80 less a month, or $960 a year, on that lower rate.
After the rate cut in February and more rate cuts expected throughout the year, borrowers should be feeling some serious relief.
What happens next
Although the cash rate has been cut, it doesn't mean your home loan will automatically be cut.
Over the next few days banks and lenders will announce whether or not they're cutting their variable rates and by how much. We will be
tracking the rate changes here as they come through.
Lenders will also announce the date from which the lower variable rate comes into effect. For some it can take a couple of days but for others it can take a couple of weeks.
Once the dust has settled and we have a clear idea of who has passed on the rate cuts and who has not, it's time to decide if you want to stay with your home loan lender. You should now compare against the rest of the market how your lender has adjusted its rates, checking if you're on a competitive rate or not.
Find a better home loan
Take our easy quiz and start saving.
If you're not, calculate how much you might save by moving to one of the stronger rates available using our mortgage repayment calculator.
Ask a question