Australian homeowners could soon see relief, with the Reserve Bank of Australia (RBA) tipped to cut the cash rate again this week.
A Finder survey shows 91 per cent of economists expect a 25 basis point reduction after the RBA’s two-day meeting starting Monday. If that happens, the cash rate will drop from 3.85 per cent to 3.60 per cent.
In July, the RBA kept rates steady. Governor Michele Bullock said the decision was about timing rather than direction. She explained that the bank was waiting for more data to confirm that inflation was falling.
Fresh figures from the Australian Bureau of Statistics show headline inflation fell from 2.4 per cent to 2.1 per cent between March and June. Underlying inflation, measured by the trimmed mean, also eased from 2.9 per cent to 2.7 per cent. Both are now within the RBA’s 2–3 per cent target range.
If banks pass on the full cut, a homeowner with a $500,000 mortgage could save about $2,884 per year. Finder’s head of consumer research, Graham Cooke, said last month’s decision to hold rates disappointed many borrowers. He warned that skipping another cut could hurt the RBA’s credibility.
“Banks will be under intense scrutiny to pass on a cut in full,” he added.
Still, not everyone agrees a cut is the right move. University of Sydney economist Stella Huangfu noted that trimmed mean inflation is still 2.7 per cent — high within the target band and slightly above the RBA’s forecast. She also said the bank has already cut rates twice this year, giving it room to pause and assess the impact before taking further action.
