The Reserve Bank of Australia (RBA) has held the official cash rate in their April meeting at 4.10%.
Despite inflation gradually easing and moving closer towards the RBA’s target mid-point of 2.5%, the board’s decision to hold comes as no surprise to economists from all four major banks. Since its decision, there has been rapid change from an economic standpoint.
Economic factors are changing rapidly which will affect the cash rate moving through 2025.
The current level of economic uncertainty has changed the outlook substantially. We expect the pattern of decreases to be more certain & potentially deeper than originally forecast. A 25 bpt reduction in May has been fully priced into the market with increasing discussion that it may move by more.
In addition, further consecutive reductions in July & August are also expected. A growing number of economists expect the cash rate to end the calendar year at close to 3%. Whilst the market consensus reflects a more aggressive easing cycle, the RBA continues to maintain a cautious, data dependent, stance.
What does this mean for homebuyers?
Don Crellin, Managing Director of Resolve Finance comments, “Lenders are competing hard for new business, and as a homebuyer, you have the power to take advantage. The gap between the best and worst interest rates has never been bigger, meaning the loan you choose now could impact your repayments for years.” Especially during times of change, lenders vary in their approach to pricing – one size doesn’t fit all.
“If you’re considering applying or have already been pre-approved with one lender, it’s worth being proactive whether there’s a better deal elsewhere. A mortgage broker can compare options for you — helping you secure the most competitive loan before you buy”.
Important information
Correct as at 17/04/25. 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