The RBA’s much-anticipated Cup Day rate decision has been announced

The Reserve Bank of Australia (RBA) has decided to keep interest rates steady at 4.35%, despite inflation falling to its lowest point in three and a half years and lenders cutting their rates.

RBA Governor Michele Bullock remains cautious about reducing rates, even though headline inflation returned to within the RBA’s target band of 2% to 3% for the first time since 2020.

For sellers, the RBA’s decision to hold rates at 4.35% may temper buyer demand, making it crucial to price properties competitively to attract interest.

For buyers, the steady interest rates mean borrowing costs remain high, but the potential for future rate cuts could offer some relief down the line.

Shane Petros, CEO & Principal Director of Australian Finance Hub, says, “For borrowers, this pause in interest rate changes, presents a valuable opportunity. It allows individuals and businesses to take a step back and evaluate their financial situations. Whether you’re looking to manage your existing debt more effectively or considering refinancing options to take advantage of favourable terms, this moment of stability provides a crucial window for planning.

In this environment, comparing home loans is more important than ever, as it allows buyers to find the most competitive rates and terms, potentially saving thousands over the life of the loan.

“Now is the perfect time to assess your financial position,” Shane says. “By evaluating your current debts, understanding your cash flow, and exploring refinancing opportunities, you can better position yourself to capitalise on future market shifts.”

When will rates go down?
Inflation is now down to 2.8%, largely due to temporary government rebates on electricity and lower petrol prices. While falling inflation is welcome news, the RBA and the International Monetary Fund project that inflation will exceed 3.5% again in 2025. Most analysts do not anticipate a rate cut before February 2025, with markets predicting a drop to 4.1% by April next year.