Rate Cuts?

With speculation mounting about when the Reserve Bank will move on rates, borrowers are asking the same question: what would a cut actually mean for me?

On repayments, a 0.25% cut on a $600,000 variable loan reduces monthly repayments by roughly $90–$100. Two cuts, roughly double that. It is welcome relief, but it is not a reason to wait to buy — because the second effect is arguably bigger.

Borrowing power. Lenders assess your ability to repay at a buffer above the actual rate. When rates fall, that assessment rate falls too, and borrowing capacity lifts. Historically, increased capacity across the market has flowed straight into prices, meaning buyers who wait for cuts often find the home they wanted has moved further away.

For existing borrowers, the key point is that lenders do not always pass cuts on in full, or quickly. If your lender drags its feet, that is your cue to have your rate reviewed — we do this for clients constantly and it costs you nothing.

If you are on a fixed rate, a cut does not change your repayments until the fixed period ends, but it is a good time to plan what happens at expiry so you are not rolled onto an uncompetitive revert rate.

Whatever the RBA does next, the borrowers who come out ahead are the ones with a clear strategy. Book a free strategy session and we will model your options under different rate scenarios.