Mortgage holders are set for more relief, with the RBA today trimming the official cash rate to 3.85% — its second cut in three months.
After holding steady at 4.35% throughout 2024, the Central Bank’s move marks a return to sub-4% territory for the first time since mid-2023 – a welcome shift for many Melbourne households.
The RBA said that today’s 0.25% drop was based on ‘inflation for the March quarter [which] provided further evidence that inflation continues to ease.
‘At 2.9 per cent, annual trimmed mean inflation was below 3 per cent for the first time since 2021 and headline inflation, at 2.4 per cent, remained within the target band of 2–3 per cent.’
Meanwhile, it’s shaping up to be a competitive, borrower-friendly market.
Bank Australia recently reduced its three-year fixed Clean Energy Home Loan by 20 basis points, bringing the rate to 4.94% — the lowest green loan rate in Canstar’s current listings.
Macquarie Bank followed, cutting its two- and three-year fixed rates by 20 basis points to 5.19%, reclaiming the lowest fixed rate for general borrowers.
Aussie Home Loans made the boldest move so far, trimming select fixed rates by 0.5%, in a clear signal that the home loan market is heating up.
CBA pre-empted today’s RBA move with a cut to its variable rate, now sitting at 5.84%, while Westpac and ANZ have also lowered rates across selected products.
In total, around 35 lenders – including Mortgage House, People’s Choice and Pacific Mortgage Group – are now offering variable rates under 5.75%.
For homeowners, today’s cut could mean a monthly saving of $90 to $150, depending on loan size and product terms.
However, there are always global issues to consider.
With massive tariffs that threaten China – our biggest trading partner – and general chaos caused by U-turns and policy on the fly, the US President is laying ground that even the hefty Bullock team at the RBA is struggling to plough.
‘While recent announcements on tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries,’ noted the Central Bank, rather diplomatically.
And the RBA predicts underlying inflation to rise this year to be ‘around the midpoint of the 2–3 per cent range throughout much of the forecast period.’
Meanwhile, a new Finder survey shows 19% of mortgage holders plan to refinance in the next six months – the equivalent of around 627,000 loans. Looks like we might get busy!
If you would like to review your mortgage rate, contact Mortgage Broker Melbourne.
We are one of the most positively reviewed mortgage brokers in Melbourne.
You can find out more in our recently published article on preparing for a rate cut.
Additionally, we can offer you tips on how to uncover lower rates, boost your savings, consolidate other debts, and take the pressure off increases in household costs.
Marc has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!