RBA interest rates live updates: Central bank hold rates at 4.35pc as homeowners now await Bullock’s next move

Westpac has blamed Reserve Bank interest rate hikes instead of just Budget tax changes on investment properties for plunging mortgage applications, with first-homebuyer activity remaining unchanged despite a housing market downturn.

Nathan Goonan, the bank’s chief financial officer, yesterday revealed an 18 per cent plunge in owner-occupier mortgage applications and a corresponding 26 per cent slump in investor loan applications since the May Budget, delivered a week after the third rate hike this year.

“I guess we’d probably draw some conclusion from that that the rate impact is probably equal or potentially a bigger impact than anything that happened in the Budget,” he told analysts on Monday in a conference call.

“You’ve got a mortgage market that has got a period of real dislocation whether it be through the Budget changes and then through rates.”

Overall mortgage applications had fallen by 20 per cent since the May 12 Budget, with loan applications 11 per cent below the five-year average, with a mortgage slowdown also expected in the September quarter.

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The Finance Brokers Association of Australia says Bullock and Co. must consider the “real world” before making today’s rates call.

“And in the real world people are hurting and mortgage stress is rising,” said CEO Leo Gagic.

“For the sake of these thousands of Australians just hanging on to their mortgage, I urge the RBA not to consider a rate rise today.”

The FBAA said new data by comparison group OurTop10 that shows an 18 per cent increase in national mortgage default risk is deeply concerning, but highlights growing financial pressure facing Australian households.

Mr Gagic said many households were reaching a financial tipping point after years of drawing down savings.

He urged those struggling to “be open and honest about your circumstances and contact your lender as early as possible. Don’t wait until you have missed a payment.”

“Explain your situation and ask to speak with the lender’s hardship team,” he said.

Mr Gagic said lenders may be willing to negotiate a more competitive interest rate or provide temporary relief measures such as reduced repayments, a repayment pause, an extended loan term, or a loan restructure.

“Clearly outline what has changed, what you can realistically afford, and provide any supporting information requested,” he said.

“This can help you and your lender agree on a sustainable arrangement that gets you back on track.”

Nearly three-quarters of car insurers have failed to explain the key factors driving up premiums, which have surged at twice the pace of inflation over five years.

Yet according to new findings from the corporate watchdog, almost one in three motorists who challenged their renewal bill won a cheaper price without changing their cover.

The average comprehensive premium jumped more than 42 per cent between June 2019 and June 2024, double the 21 per cent rise in consumer prices.

Premiums then rose another 8 per cent in the year to July 2025.

Australian Securities and Investments Commission commissioner Alan Kirkland said the findings showed customers’ loyalty was often not repaid.

“Insurers seem to be banking on the fact that lots of people don’t know that they can push back, or they think it’s going to be too hard,” he told The West Australian on Monday.

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The Reserve Bank delivered three rounds of rate relief in 2025 ... then promptly snatched them away earlier this year as war-fuelled inflation soared.

The pain has been felt across the country, with millions of mortgageholders back to square one - and even worse off after factoring in higher grocery prices and the pain at the bowser.

Looking at the table below, it’s not hard to see why so may households are struggling to make ends meet and fear what even higher home loan repayments would do to their finances.

With Michele Bullock ruling nothing in or out at the last RBA meeting, Canstar warned homeowners to take steps to prepare.

It said getting just 0.25 knocked off your rate could protect your finances from any further hike .

Here’s how to approach the negotiations with your lender:

• Check your rate: Your target, as an owner-occupier should be under 6 per cent. It’s a stretch but there are now 49 lenders offering at least one variable rate under this mark.
• Check up on your own bank: See what it’s offering new customers. This 30-second check will show if you’re paying a loyalty tax.
• Arm yourself with two counter offers: This shows your bank you’re prepared to move if needed.
• Ask your bank for a rate review: Be polite, professional and precise.
• Be ready to walk: If they won’t budge, it could be time to switch to a lender willing to offer you its lowest advertised rate. Just make sure to factor in any switching fees before you make the leap.

Today’s Reserve Bank interest rate meeting will be pivotal - for what it means for future rate decisions.

Money markets and economists are in near-unanimous agreement that the monetary policy board will hold the cash rate steady at 4.35 per cent when it wraps up its latest two-day meeting this afternoon.

But rate watchers will get a new set of economic forecasts and Reserve Bank commentary to pore over for signs of where interest rates will go next.

With uncertainty still hanging over the Middle East conflict, house prices and the resilience of Australian households, Morgan Stanley’s Australian chief economist Chris Read expects a hawkish tone from the board statement and governor Michele Bullock’s press conference.

“The governor is likely to emphasise the persistence of above-target inflation and the risk it poses to inflation expectations, although the softer domestic demand outlook should temper that message somewhat,” he and his colleagues wrote in a research note.

At 3.6 per cent, the quarterly trimmed mean - the central bank’s preferred measure of inflation - is still well above its 2 to 3 per cent target range.

But the June outcome was lower than the 3.8 per cent figure in the Reserve’s May forecasts, which prompted traders to slash the odds of the bank staying on hold for the rest of the year.

Despite the better-than-expected inflation data, Ms Bullock will want to keep the door open to future rate hikes, given the uncertain outlook.

Along with economists at all four big banks, the Morgan Stanley analysts expect the Reserve Bank’s next move will be down rather than up.

The key signal for the Reserve Bank would be the faster-than-expected weakening in the housing market since May, they said.

“Housing is the main domestic transmission channel for monetary policy,” they said.

“Further softening should give the RBA greater confidence that demand will weaken over coming months, reinforcing its assessment that policy settings are restrictive.”