Managing a mortgage can often feel like a constant financial balancing act.

However, recent developments suggest a potential shift that could bring relief to many.

With the cash rate steady since late 2023, there’s growing speculation about a possible change following an upcoming key meeting. If the anticipated adjustment occurs, it could ease the financial pressure many have faced in recent months.


The Reserve Bank of Australia (RBA) has kept the cash rate steady at 4.35 per cent since its last hike in November 2023.

But, there's growing anticipation that a rate cut could be announced following the board’s meeting on 18 February.

This potential rate cut would be the first since November 2020, when the RBA introduced measures to support an economy reeling from the COVID-19 pandemic.


If the banks pass on a cut of 0.25 percentage points in full, homeowners could see significant savings on their monthly mortgage repayments.

For instance, on a $600,000 mortgage, monthly repayments could be trimmed by $92, according to Canstar.

This is based on an owner-occupier paying principal and interest on the average variable rate of 6.33 per cent with 25 years remaining on the loan.


For those with a $700,000 loan, the monthly savings could rise to $108; for a $1,000,000 mortgage, the savings could jump to $154.

Sally Tindall, Canstar data insights director, has expressed optimism, stating, 'Australia is a major step closer to the start of cash rate cuts on the back of this latest set of inflation results, after what has been more than two gruelling years of higher rates.'

She believes that the RBA will consider the case for a cut and could pull the trigger now that it has better-than-expected inflation results.

While there is a chance that 'sticky' services inflation could cause the board to hesitate, the data is moving in the right direction, with core inflation recording two decent-sized drops in the last couple of quarters.

‘When it comes, the first cash rate cut will translate into almost $100 back into the pockets of someone with a $600,000 mortgage,’ Tindall said.

‘That’s not just a one-off saving, but spare money borrowers can bank month after month, with more cuts likely to come.’

‘Rate cuts will be a weight off the shoulders of borrowers across the country and could potentially put the wind back in the sails of home buyers.’


The Australian Bureau of Statistics recently reported that trimmed mean inflation was below market and RBA expectations at 0.5 per cent for the December quarter.

This placed the six-month annualised figure for underlying inflation at 2.7 per cent, near the mid-point of the Reserve Bank’s 2 to 3 per cent target band.

The Australian Council of Social Service (ACOSS) has argued that the RBA has no choice but to cut rates, citing the consistent fall in inflation and the financial stress that high rates have placed on those with low and modest incomes.

As for the number of cuts the RBA might announce this year, predictions vary.

CBA head of Australian economics Gareth Aird anticipates four 25 basis point cuts in 2025, which would leave the cash rate at 3.35 per cent at year’s end.

Westpac agrees with the forecast of four cuts, while NAB is predicting five and ANZ two.


The prospect of an interest rate cut is indeed a beacon of hope for many Australian homeowners.

It's a reminder that while we can't control the economy, we can certainly benefit from its ebbs and flows.

So, as we await the RBA's decision, let's keep our fingers crossed for a favourable outcome that could see us slashing our mortgage payments overnight.
How would a potential interest rate cut affect your household budget? Are you planning for lower mortgage payments, or are you sceptical about the banks passing on the full cut? Share your thoughts and experiences in the comments below.