Are You on the Best Rate? Reserve Bank Cuts Interest Rates. It’s Time to Talk.

RBA Cuts Interest Rates – What Should You Do Now?

This month, the Reserve Bank of Australia (RBA) cut the official cash rate by 0.25 percentage points to 3.6% in August 2025. This marks the third rate cut this year, as the central bank continues to balance slowing economic growth with the challenge of keeping inflation under control. The RBA’s next meeting is scheduled for 30 September 2025.

Key Highlights from the RBA Meeting

Here are the key takeaways from the recent RBA’s decision and announcement:

• Inflation remains a concern – While inflation has eased significantly since its 2022 peak, it still sits above the RBA’s 2–3% target range. Measures of underlying inflation remain elevated, so the RBA is cautious about cutting too quickly.
• Household cost-of-living pressures – Rising rents, higher insurance premiums, and everyday expenses continue to weigh heavily on households. The RBA noted that while lower interest rates offer some relief to borrowers, many families are still feeling stretched.
• A cautious approach to future cuts – The RBA has signalled it will continue to monitor inflation closely, with any future rate reductions likely to be gradual.
• Predictions for future cuts – Markets had largely anticipated this August move. Economists are now divided on whether another cut will come before the end of 2025, or whether the RBA will pause to assess the impact of the three cuts already delivered this year.
• How low will rates go? – Some analysts suggest the cash rate could dip slightly further to 3.5% by year-end, but the RBA has indicated it may hold steady if inflation proves more persistent.
• Immediate relief for borrowers – The big four banks have confirmed they will pass on the full 0.25% reduction to variable mortgage holders, with new rates set to take effect from early September.

Impact on the Property Market

The property market has been adjusting to a new interest rate environment, and lower borrowing costs are beginning to influence buyer sentiment.

• Sydney and Melbourne are stabilising – After a period of decline, both cities are showing signs of stabilising. Softer conditions remain, but recent activity suggests the pace of price falls is easing.

• Other capitals have held firm- Brisbane, Adelaide, and Perth have held up more strongly, though the surge in values seen in 2022–23 has moderated.

• Stabilisation expected – With borrowing costs now easing, the latest cut is expected to support demand and improve confidence across key markets.

What Should You Do Now?

If you have a mortgage or are considering borrowing, now is the time to assess your financial position:
✔ Review Your Current Interest Rate – Check what you’re paying and compare it to the market. Not all banks pass on rate cuts in full.
✔ Negotiate with Your Lender – If your rate isn’t competitive, your bank may be willing to offer a better deal if you ask.
✔ Consider Refinancing – If your lender isn’t offering a good deal, refinancing could lower your repayments or give you more flexibility.

How Can Morrows Help?

If you or a family member wants to ensure you’re getting the most competitive rate with the right lender, speak to your Morrows advisor today.

We can connect you with our trusted mortgage specialists, who have access to major lenders and private banks, to help you find the best options for your needs. They’ll provide an obligation-free finance review on commercial or residential loans. Helping you explore your options and secure a loan that aligns with your financial goals.