The RBA has reduced interest rates to 3.85%. Discover how this affects your home loan, what the RBA said about inflation, and why future rate cuts remain uncertain.
What did the RBA say?
The RBA reduces rates and the RBA’s latest decision comes off the back of inflation finally easing into its target range of 2 to 3 percent. In its statement, the central bank noted that:
“The risks to inflation have become more balanced. The RBA remains cautious about the outlook.”
Governor Michele Bullock went further, highlighting that both international uncertainty and local economic shifts are still in play:
“There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments.”
In short, the RBA is treading carefully. While inflation is softening, global risks like new trade tariffs, ongoing geopolitical tension, and tight labour markets mean the path forward is far from clear.
What this means for homeowners
If you have a $652,000 loan over 30 years, this 0.25 percent rate cut could reduce your repayments by around $108 a month—saving you more than $1,290 per year, assuming your lender passes on the full cut.
“That’s real money back in your pocket,” says Spiro Kolokithas, Mortgage Broker and Managing Director of melbourne mortgage broker What If We Finance. “And if your lender doesn’t pass it on, or you haven’t reviewed your loan in over a year, it’s worth having a mortgage advisor run the numbers. You might be paying more than you need to.”
Now is a smart time to review your loan structure, check for better offers, and consider how this change affects your financial plan.
A positive sign for buyers
Lower rates also help improve borrowing power. With a lower cash rate, banks often adjust their servicing benchmarks, which can mean you’re able to borrow more—especially useful if you’re a first home buyer or upgrading.
“When rates fall, people who were just short on their borrowing capacity often find themselves in a much stronger position,” Spiro says. “A mortgage broker can help you quickly work out how much more you could access.”
Will rates fall again?
This is where things become less certain.
While several banks are forecasting further cuts this year, they disagree on the timing. Some expect another move in August, while others suggest cuts could continue through to November or even early 2026. But the RBA itself hasn’t confirmed anything.
Why? Because inflation might be easing, but it’s not gone. Strong wages growth, low unemployment, and global instability make future decisions harder to predict.
“The RBA will be cautious from here,” says Spiro. “They’ve made it clear that they want to support the economy, but they also don’t want to overstimulate it and risk inflation flaring up again. So even if we’re in a lower-rate environment, that doesn’t mean we’re heading back to record lows.”
When is the next RBA meeting?
The RBA’s Monetary Policy Board is due to meet five more times this year. Key dates include:
- 8 July
- 12 August
- 30 September
- 4 November
- 9 December
Borrowers and lenders alike will be watching closely to see whether conditions shift further and how the RBA responds.
What should you do now?
Whether you’re already repaying a mortgage or planning to buy, now is the time to check in with a mortgage broker. With rates falling and lenders reviewing pricing, you could unlock real savings or increase your borrowing power.
At What If We Finance, we work one-on-one with clients to help them make the most of changing market conditions. We compare loans from over 40 lenders and offer tailored advice with no pressure, just results.
Book your free strategy session today with a trusted mortgage advisor and take the next step with confidence.
