The Reserve Bank of Australia (RBA) may be getting closer to another interest rate cut. While nothing is locked in yet, inflation is finally sitting within the RBA’s target range—raising hopes for lower borrowing costs as early as July.
For many Australians looking to buy a home or refinance, this could present a valuable opportunity. But what does this really mean, and how should you prepare?
Let’s explore what’s happening and how a mortgage broker like What If We Finance can help you make the most of changing conditions.
Inflation Is Within Target, But Uncertainty Remains
In April, the Australian Bureau of Statistics reported that headline inflation was 2.4 per cent. That’s still within the RBA’s 2 to 3 per cent target range. Their preferred measure—trimmed mean inflation—also rose slightly to 2.8 per cent.
While this is good news overall, the RBA has said it wants to see inflation stay low “sustainably” before it cuts rates further. That means another drop is possible, but not guaranteed.
Still, financial markets are watching closely. There is currently a 68 per cent chance priced in for a cash rate reduction in July, which would lower it from 3.85 per cent to around 3.6 per cent. Some economists believe it could even fall to 3.1 per cent by the end of 2025.
What Does a Potential Rate Cut Mean for You?
If the RBA cuts rates again, it could open the door to lower home loan repayments, better interest rate offers, and improved borrowing capacity for buyers.
According to Spiro Kolokithas, Managing Director at What If We Finance, now is the time for borrowers to pay attention.
“With inflation easing and a rate cut highly possible, it’s smart to review your home loan now,” says Kolokithas. “Even if the RBA doesn’t move straight away, banks are already starting to compete harder for business, and that can lead to better deals.”
Whether you’re looking to buy your first home, refinance an existing loan, or invest in property, having a trusted mortgage broker by your side can help you stay ahead of market changes.
Key Trends Shaping the Market
Several signs point to a cooling economy, which could give the RBA confidence to lower rates again. These include:
1. Rent Growth Is Slowing
In April, rent inflation slowed to 5 per cent, the lowest rate since early 2023. While still high compared to pre-COVID levels, it shows signs of easing.
2. Building Costs Have Stabilised
The cost to build a new home increased by just 1.2 per cent over the past year, down sharply from the 22 per cent peak seen in mid-2022. Supply chain pressures have eased, and demand is becoming more balanced.
3. Food Prices Are Mixed
Food inflation slowed to 3.1 per cent in April, though some everyday items like eggs and produce are still rising due to supply issues. Overall, though, price growth in supermarkets is no longer spiking as it did in 2022.
These figures suggest that the rapid price increases of the past few years are now behind us, at least for now.
When Might the RBA Move?
Although July is shaping up as a likely option, the RBA may still wait until after the next set of quarterly inflation data, which is due at the end of July.
Some economists, like Paul Bloxham at HSBC, believe the RBA will take a careful, step-by-step approach—perhaps cutting once per quarter, depending on how inflation behaves.
Others, like JPMorgan’s Tom Kennedy, think the tone from the RBA is becoming more supportive of an earlier move, especially if upcoming data stays within target.
What Should You Do Now?
Trying to predict exactly when the RBA will act is difficult. Instead of waiting and wondering, it’s often better to be proactive. Reviewing your current loan, understanding your borrowing power, or getting pre-approved can put you in a stronger position if rates do fall.
What If We Finance works with clients across Australia to compare lenders, negotiate rates, and secure better home loan outcomes.
“Our job as mortgage brokers is to make the process simple and strategic,” says Spiro Kolokithas. “We don’t just wait to see what the RBA does—we help you plan around different scenarios so you’re ready either way.”
The Bottom Line
Interest rates are still relatively high by recent standards, but that could be changing soon. With inflation tracking lower and the RBA sounding more open to cuts, the months ahead may offer opportunities for savvy borrowers.
If you want to get ahead of the next potential rate cut, now is the time to speak to a mortgage broker who knows the market.
At What If We Finance, we offer expert guidance, personalised service, and fast turnaround times—so you don’t miss out on the best deal available.
