The Reserve Bank of Australia (RBA) has decreased the official cash rate to 3.60% in the August meeting.
Why did they cut the rate by 0.25bps?
With inflation now below the RBA’s target midpoint, along with slower economic growth and weaker consumer spending, the RBA is continuing to lower the cash rate. The RBA has made clear that rate movements will still be determined by data and this will continue to guide future decisions.
What does this mean for home buyers?
- More confidence in the market: Lower interest rates will help stimulate housing demand by providing greater certainty to a borrower around current and future repayment affordability.
- Increase in borrowing capacity: Usually with each 25-basis point cut comes a lift in borrowing capacity for prospective home buyers. This does depend on your lender as not all lenders will respond in the same way. Best to check with your broker.
Wondering when the right time to enter the property market is?
With further reductions predicted for later this year, many are wondering whether it’s worth waiting.
While the thought of waiting for a lower rate may be appealing, rates are but one consideration in the home buying decision. Many other market factors are at play which should be considered. The best time to enter the market is when you’re financially ready to do so.
If you’re wondering what this recent cash rate reduction means for you in your home buying journey. It’s worth taking a proactive approach and reach out to a mortgage broker today. They can assess and compare home loan options for you – helping you secure the most competitive loan before you buy.
Important information
Correct as at 18/08/25. Information on this page does not consider your personal needs and financial circumstances and you should consider whether it is appropriate for you. Lenders terms and conditions apply and may vary. All Financial services provided by Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN: 65 079 545 378 Australian Credit Licence No. 385487