In a move that’s set to bring welcome relief to many households, the Reserve Bank of Australia has announced a 0.25% cut to the official cash rate, bringing it down from 3.85% to 3.6%.
This is the third rate cut in 2025, following softer-than-expected inflation data and continued signs of economic slowdown.
For mortgage holders, that quarter-percentage drop could mean hundreds in annual savings, depending on their loan size and structure. It also signals the RBA’s intent to ease pressure on households and support broader economic activity.
Shane Petros from Australian Finance Hub says:
“This marks the third rate cut from the RBA in 2025, and it reflects the ongoing effort to stimulate a slowing economy. A 0.25% reduction can provide meaningful relief for mortgage holders, especially amid rising living costs and global economic uncertainty. For the average borrower, it could mean significant savings on monthly repayments and an opportunity to redirect funds toward savings or reducing debt.”
He continues, “With inflation showing signs of easing and consumer confidence still recovering, the RBA is clearly trying to support household spending and economic growth. It’s a strong reminder for homeowners and prospective buyers to review their loan structures and ensure they’re taking full advantage of current conditions.”
What should borrowers do now?
If you’re a homeowner or planning to buy, this rate cut is an ideal time to:
- Reassess your home loan and check if you’re getting a competitive rate
- Consider refinancing or negotiating with your lender to make sure they’re passing on the cut. If not talk to a reputable broker, such as Australian Finance Hub.
- Be sure to budget to allow for future holds so you don’t overspend now.
As always, seek expert advice before making any major financial decisions.
