What Does the RBA’s Interest Rate Announcement Mean for Homeowners? May’s Rate Report
We’re reaching the end of May and—one cash rate cut, a whole lot of tariff anxiety, and a federal election later, we’re already a third of the way through 2025! The RBA’s interest rate announcement, fittingly, marks the third of eight decisions we’ll see this year, each one helping determine how much homeowners will pay on their mortgages.
Was the Cash Rate Cut?
Yes! The cash rate has, excitingly, been cut. Almost all of us expected this. But would the RBA go the extra mile and reduce it by .50 percentage points? While that’s not the case, this is news still worth celebrating.[1]
The cash rate has been cut by .25 percentage points to 3.85%
For reference, the last time the cash rate was this low:
- The RBA had recently raised rates 10 consecutive times before a hold in April.
- Inflation sat at 6.1%. [2]
- COVID-19 had only just been declared no longer a global health emergency.
- Miley Cyrus’ Flowers was at the top of the charts.
Two full years later, we’re finally seeing the cash rate come down consistently, and homeowners and homebuyers can breathe a collective sigh of relief.
What Does This Cash Rate Decision Mean for Homeowners?
If you’re on a variable rate, your interest rates could be coming down – fast. Many experts predict more cash rate cuts soon, with three of the big four banks forecasting a cut each quarter, potentially bringing the cash rate down to 3.35% by year’s end [3].
But just because the RBA reduces the cash rate doesn’t mean banks will follow suit. Some lenders may choose to keep rates unchanged, which is why it’s important to get a home loan health check with your local MoneyQuest mortgage broker.
If your lender won’t offer a better rate after this cut, we can help you find one who will.
What Does This Cash Rate Decision Mean for Homebuyers?
If you’ve been waiting for a sign to enter the property market, the RBA’s interest rate announcement could be it. But don’t wait too long. Lower rates are expected to heat up buyer demand, and February’s rate cut was enough to bounce the housing market back from a two-month downturn.
Reach out to your local MoneyQuest mortgage broker today and get ahead of the competition.
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