RBA interest rates live updates: Reserve Bank hands down long-awaited interest rate cut to Aussie homeowners
And that, folks, is a wrap!
In case you missed it, the Reserve Bank today handed out a long-awaited interest rate cut for suffering Aussie homeowners.
The cash rate was cut from 4.35 per cent - where it has been wedged solid since November 2023 - to 4.1 per cent.
Within 20 minutes of the welcomed decision, all four of the big four banks said they would pass on the full cut to variable rate customers. On a mortgage of $600,000, that’ll be an immediate $92-a-month saving when the new lower rates take effect towards the end of the month.
So, the big question now is: Will we get more?
That’s the million-dollar question. RBA governor Michele Bullock highlighted the strength of the labour market when she faced the media after the rates decision and said it would be a crucial factor considered before there’s any further cuts this year.
Market watchers, who had priced in a reduction - but had showed some signs of hesitation early today about whether the board would actually go through with it - will be adjusting their models overnight and we should hear more tomorrow on their forecasts for the rest of the year.
Some are already banking on two more cuts that will take the official cash rate to 3.6 per cent by December.
And that’s where it could stay, with Bullock warning those who reaped massive rewards with record low interest rates during the pandemic that the cash rate would be returning to a more neutral setting.
But, in this day and age, a saving’s a saving.
Use it wisely.
Thaks for joining us today.
And for all the news on what you may have missed, what it means for your budget and your mortgage, what it means for the timing of the Federal election and what the experts are saying, check out the feed below ...
Key events
18 Feb 2025 - 01:37 PM
RBA rate cut ‘won’t impact election timing’: PM
18 Feb 2025 - 01:23 PM
Labour market data key to next cut: RBA’s Bullock
18 Feb 2025 - 12:33 PM
Business groups welcome cuts and call for reforms
18 Feb 2025 - 12:29 PM
Where is the economy going?
18 Feb 2025 - 12:09 PM
Will this mean an election gets called soon?
18 Feb 2025 - 12:05 PM
Much-hyped rate cut will renew speculation of early election
18 Feb 2025 - 11:53 AM
How much will you save?
18 Feb 2025 - 11:49 AM
What now?
18 Feb 2025 - 11:46 AM
‘Very welcome news’: Treasurer responds to rate cut
18 Feb 2025 - 11:43 AM
Major banks follow rate cuts with mortgage drops
18 Feb 2025 - 11:38 AM
So how many cuts will we get now there’s been a first move?
18 Feb 2025 - 11:36 AM
Here’s what the RBA had to say ...
18 Feb 2025 - 11:31 AM
At long last ...
18 Feb 2025 - 11:21 AM
Will it be champagne or the tissues?
18 Feb 2025 - 11:01 AM
This graph says it all ...
18 Feb 2025 - 10:32 AM
Give ... and take (and why bank loyalty could be robbing you blind)
18 Feb 2025 - 09:57 AM
The ‘for’ and ‘against’ case for a cut (or a hold)
18 Feb 2025 - 09:43 AM
There’s a first time for everything ... even mortgage relief!
18 Feb 2025 - 09:25 AM
The RBA cuts rates ... so, what do you do next?
18 Feb 2025 - 08:55 AM
Why the RBA’s possible cash rate cut impacts all Australians
18 Feb 2025 - 08:47 AM
Could interest rate cut spark banking mortgage war?
18 Feb 2025 - 08:39 AM
RBA board meets to begin deliberation
18 Feb 2025 - 08:32 AM
What does your bank think will happen with rates today?
18 Feb 2025 - 08:21 AM
When will the RBA make an interest rate announcement?
18 Feb 2025 - 06:23 AM
Albanese shares ‘respect’ for RBA ahead of rate decision
18 Feb 2025 - 05:54 AM
Interest rate outcome set to influence election timing
18 Feb 2025 - 04:57 AM
How much would a rate cut save the average loan?
18 Feb 2025 - 04:54 AM
D Day for RBA rates call as economists warn cut not certain
Interest rate outcome set to influence election timing
Mortgage holders won’t be the only ones eagerly awaiting the Reserve Bank’s decision on interest rates.
Federal MPs will also be watching to see if a rate cut will be enough for Prime Minister Anthony Albanese to trigger an election.
While the election is not due to be held until May 17 at the latest, there is speculation the first lowering of interest rates in almost five years would lead to a national poll being called sooner than expected.
With cost-of-living issues set to dominate the election, any reduction in interest rates would be front of mind with voters, YouGov’s polling director Amir Daftari says.
“If there is a rate cut, then that might be psychological relief among voters that things are going in the right direction,” he told AAP.
How much would a rate cut save the average loan?
Borrowers could be just weeks away from mortgage relief with a long-awaited Reserve Bank of Australia interest rate cut widely expected to be handed down.
If the RBA board does lower the cash rate by 25 basis points to 4.1 per cent on Tuesday, expect the banks to pass through those savings in full to their variable home loan rates, says Sally Tindall, data insights director at financial comparison site Canstar.
For an average owner-occupier with a $600,000 loan, that would translate to a $92 reduction to their minimum monthly repayments.
“However, we could see some lenders cutting new customer variable rates even further to capitalise on what could become a refinancing revival,” Ms Tindall said.
D Day for RBA rates call as economists warn cut not certain
Experts warn an interest rate cut is not a done deal on Tuesday as millions of Australians pray for mortgage relief at the Reserve Bank’s first board meeting of the year.
The RBA’s call will also be crucial heading into the Federal Election — due by May — with Prime Minister Anthony Albanese and Opposition Leader Peter Dutton setting their economic narratives on the cost-of-living crisis.
Markets have ramped up betting that the RBA will make its first downward move since late 2020, and traders predict a 90 per cent chance of a cut.
Those hopes were boosted after core inflation slowed to 3.2 per cent in December, the slowest pace since 2021.
