It’s 'all but certain’: Why some economists believe relief is finally coming for your mortgage
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The cost of living has become a constant worry for many older Australians, especially when it comes to interest rates and how they affect household budgets.
But recent economic shifts may be pointing to a change on the horizon—one that could impact mortgage repayments and the broader financial landscape.
Here’s what the latest figures reveal and how the nation’s top banks are responding.
Australia’s economic outlook appeared to shift this week as new inflation data gave two of the nation’s major banks reason to rethink their forecasts.
In a move that could ease financial pressure for many households, both NAB and the Commonwealth Bank tipped a potential interest rate cut when the Reserve Bank meets on 8 July.
Commonwealth Bank economist Harry Ottley went so far as to call a July cut ‘all but certain’, pointing to fresh inflation data that came in lower than anticipated.
Headline inflation dropped to 2.1 per cent in May, down from 2.4 per cent in April—a result that surprised many, given predictions that inflation would remain steady.
A decline in fuel and rental costs played a major role in the drop, while the trimmed mean inflation—which strips out volatile price movements—also slid from 2.8 per cent to 2.4 per cent.
Both numbers now sit comfortably within the Reserve Bank’s target band of 2 to 3 per cent.
According to Ottley, ‘The slowdown in the core inflation gauge prompted investors to ramp-up bets for another interest rate cut from the RBA on July 8 to 94 per cent, from 81 per cent before the release.’
That potential cut isn’t just symbolic—it could translate to real savings. For someone holding a $600,000 mortgage, a 25-basis-point drop in the cash rate would lower monthly repayments by about $90.
While the Commonwealth Bank and NAB pointed to July, Westpac and ANZ signalled they expected the Reserve Bank to act in August instead.
Still, momentum seemed to be building towards change, especially after the latest figures showed inflation retreating at a faster pace than expected.
Adding further fuel to the predictions, Ottley confirmed the bank’s economists now expected two back-to-back 25 basis point cuts—one in July and another in August—bringing the cash rate down to 3.35 per cent by year’s end.
Concerns about global oil prices—especially in light of recent conflict in the Middle East—did little to shake confidence in the rate cut forecasts.
Moody’s Analytics head of Australian economics, Sunny Nguyen, said the situation was stabilising: ‘Prices have fallen 6 per cent as the Israel-Iran ceasefire reduced supply disruption risks.’
Nguyen added, ‘We expect the RBA to look through any temporary oil-driven inflation spikes, particularly given the broader disinflationary trend.’
More clues into the health of the economy were expected to land soon, with household wealth data for the first quarter due for release.
At the end of 2024, wealth growth had already slowed to its weakest point in over two years, weighed down by consecutive quarters of falling house prices.
With interest rate decisions looming and fresh data incoming, Australians—especially mortgage holders—watched closely.
If you've ever wondered what exactly the Reserve Bank does and why its decisions matter so much, this quick explainer clears it all up.
Give it a watch—especially if you're keeping an eye on your mortgage or savings.
Source: Youtube/Reserve Bank of Australia
With interest rates possibly heading down and the cost of living showing signs of easing, would a rate cut make a real difference to your household budget? Let us know your thoughts in the comments.
In a previous story, we looked at NAB’s latest changes to interest rates for account holders—something that could directly affect how your savings grow.
For older Australians keeping a close eye on both borrowing and saving, these updates are especially worth noting.
If you’ve been wondering how a rate cut might impact your nest egg, that story offers some useful context too.
Read more: NAB reveals new interest rates for account owners. This is what your savings might look like soon
But recent economic shifts may be pointing to a change on the horizon—one that could impact mortgage repayments and the broader financial landscape.
Here’s what the latest figures reveal and how the nation’s top banks are responding.
Australia’s economic outlook appeared to shift this week as new inflation data gave two of the nation’s major banks reason to rethink their forecasts.
In a move that could ease financial pressure for many households, both NAB and the Commonwealth Bank tipped a potential interest rate cut when the Reserve Bank meets on 8 July.
Commonwealth Bank economist Harry Ottley went so far as to call a July cut ‘all but certain’, pointing to fresh inflation data that came in lower than anticipated.
Headline inflation dropped to 2.1 per cent in May, down from 2.4 per cent in April—a result that surprised many, given predictions that inflation would remain steady.
A decline in fuel and rental costs played a major role in the drop, while the trimmed mean inflation—which strips out volatile price movements—also slid from 2.8 per cent to 2.4 per cent.
Both numbers now sit comfortably within the Reserve Bank’s target band of 2 to 3 per cent.
According to Ottley, ‘The slowdown in the core inflation gauge prompted investors to ramp-up bets for another interest rate cut from the RBA on July 8 to 94 per cent, from 81 per cent before the release.’
That potential cut isn’t just symbolic—it could translate to real savings. For someone holding a $600,000 mortgage, a 25-basis-point drop in the cash rate would lower monthly repayments by about $90.
While the Commonwealth Bank and NAB pointed to July, Westpac and ANZ signalled they expected the Reserve Bank to act in August instead.
Still, momentum seemed to be building towards change, especially after the latest figures showed inflation retreating at a faster pace than expected.
Adding further fuel to the predictions, Ottley confirmed the bank’s economists now expected two back-to-back 25 basis point cuts—one in July and another in August—bringing the cash rate down to 3.35 per cent by year’s end.
Concerns about global oil prices—especially in light of recent conflict in the Middle East—did little to shake confidence in the rate cut forecasts.
Moody’s Analytics head of Australian economics, Sunny Nguyen, said the situation was stabilising: ‘Prices have fallen 6 per cent as the Israel-Iran ceasefire reduced supply disruption risks.’
Nguyen added, ‘We expect the RBA to look through any temporary oil-driven inflation spikes, particularly given the broader disinflationary trend.’
More clues into the health of the economy were expected to land soon, with household wealth data for the first quarter due for release.
At the end of 2024, wealth growth had already slowed to its weakest point in over two years, weighed down by consecutive quarters of falling house prices.
With interest rate decisions looming and fresh data incoming, Australians—especially mortgage holders—watched closely.
If you've ever wondered what exactly the Reserve Bank does and why its decisions matter so much, this quick explainer clears it all up.
Give it a watch—especially if you're keeping an eye on your mortgage or savings.
Source: Youtube/Reserve Bank of Australia
With interest rates possibly heading down and the cost of living showing signs of easing, would a rate cut make a real difference to your household budget? Let us know your thoughts in the comments.
In a previous story, we looked at NAB’s latest changes to interest rates for account holders—something that could directly affect how your savings grow.
For older Australians keeping a close eye on both borrowing and saving, these updates are especially worth noting.
If you’ve been wondering how a rate cut might impact your nest egg, that story offers some useful context too.
Read more: NAB reveals new interest rates for account owners. This is what your savings might look like soon
