RBA's rate cut is here! How much could you really save on your mortgage?
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With interest rate changes on the horizon, homeowners across Australia are bracing for some much-needed relief.
But the question remains: how much will these shifts actually impact your monthly mortgage payments?
The latest developments in the nation's banking sector are shaking things up, and you might want to keep an eye on when your bank will make its move.
Australian homeowners had been waiting for a break, and it seemed to arrive in February 2025.
After the Reserve Bank of Australia (RBA) dropped the official cash rate, many banks were quick to announce their plans to cut their variable mortgage rates.
The RBA's decision, lowering the rate from 4.35 per cent to 4.10 per cent, led to expectations of relief for borrowers.
Graham Cooke, a contributor to Yahoo Finance, highlighted how timing plays a role in these cuts.
He revealed that 'delaying or withholding parts of a cut can significantly boost the banks’ earnings.'
Cooke noted that 'if just 28 basis points are held back on $1.5 trillion of mortgages, that equates to over $10 million in additional revenue every day.'
Banks had different approaches to implementing the cuts.
Some, like Athena, were ahead of the game, reducing their lowest rates to 5.99 per cent on the same day as the RBA's announcement.
Others, including Transport and Unloan, made their adjustments a few days later, dropping rates to 6.69 per cent and 5.74 per cent, respectively.
But not all lenders acted immediately.
Some were preparing to reduce their rates in the coming days, with many expected to follow suit throughout the following week.
February 25 saw Gateway Bank's lowest rate fall to 5.60 per cent, while Ubank, Bank First, and Defence Bank followed suit shortly after.
By February 28, major players like NAB, Commonwealth Bank, ANZ, and AMP had lowered their rates, with figures as low as 5.57 per cent to 6.04 per cent.
More rate cuts were set to follow into March, with institutions like Westpac, Bank Australia, and Bank of Queensland planning reductions in early March.
For homeowners, the amount of savings from a 0.25 per cent rate cut varied depending on their mortgage size and location.
According to REA Group, those with a median-priced home could expect savings ranging from $40 to $190 per month.
The biggest savings were seen in Sydney, where homeowners stood to save up to $190 each month, while apartment owners in the Northern Territory could only pocket around $40.
As REA Group Senior Economist Angus Moore explained: 'Housing affordability is sitting at its worst level in at least three decades, and that's a big heading for how much prospective buyers can spend.'
Moore also noted that: 'Rate cuts are going to help there—it will start to improve affordability, but it's certainly not going to get it back to the sort of levels we were seeing a few years ago when mortgage rates were in the 2 per cent range.'
While a 0.25 per cent cut may not drastically change things, Moore suggested that continued reductions this year would begin to have a more noticeable impact.
Stay informed on the financial changes that could impact your repayments!
For a deeper dive into how the RBA’s decision affects mortgage holders, be sure to watch the video below.
In a previous story, we explored how rising costs are affecting senior Australians and their ability to manage day-to-day expenses.
With the RBA’s recent rate change, many are wondering if this will bring the relief they need or add more pressure.
To understand the broader financial impact on seniors, be sure to check out our full coverage on the issue.
With interest rates finally seeing a reduction, how do you think this will impact your mortgage repayments? Share your thoughts in the comments!
But the question remains: how much will these shifts actually impact your monthly mortgage payments?
The latest developments in the nation's banking sector are shaking things up, and you might want to keep an eye on when your bank will make its move.
Australian homeowners had been waiting for a break, and it seemed to arrive in February 2025.
After the Reserve Bank of Australia (RBA) dropped the official cash rate, many banks were quick to announce their plans to cut their variable mortgage rates.
The RBA's decision, lowering the rate from 4.35 per cent to 4.10 per cent, led to expectations of relief for borrowers.
Graham Cooke, a contributor to Yahoo Finance, highlighted how timing plays a role in these cuts.
He revealed that 'delaying or withholding parts of a cut can significantly boost the banks’ earnings.'
Cooke noted that 'if just 28 basis points are held back on $1.5 trillion of mortgages, that equates to over $10 million in additional revenue every day.'
Banks had different approaches to implementing the cuts.
Some, like Athena, were ahead of the game, reducing their lowest rates to 5.99 per cent on the same day as the RBA's announcement.
Others, including Transport and Unloan, made their adjustments a few days later, dropping rates to 6.69 per cent and 5.74 per cent, respectively.
But not all lenders acted immediately.
Some were preparing to reduce their rates in the coming days, with many expected to follow suit throughout the following week.
February 25 saw Gateway Bank's lowest rate fall to 5.60 per cent, while Ubank, Bank First, and Defence Bank followed suit shortly after.
By February 28, major players like NAB, Commonwealth Bank, ANZ, and AMP had lowered their rates, with figures as low as 5.57 per cent to 6.04 per cent.
More rate cuts were set to follow into March, with institutions like Westpac, Bank Australia, and Bank of Queensland planning reductions in early March.
For homeowners, the amount of savings from a 0.25 per cent rate cut varied depending on their mortgage size and location.
According to REA Group, those with a median-priced home could expect savings ranging from $40 to $190 per month.
The biggest savings were seen in Sydney, where homeowners stood to save up to $190 each month, while apartment owners in the Northern Territory could only pocket around $40.
As REA Group Senior Economist Angus Moore explained: 'Housing affordability is sitting at its worst level in at least three decades, and that's a big heading for how much prospective buyers can spend.'
Moore also noted that: 'Rate cuts are going to help there—it will start to improve affordability, but it's certainly not going to get it back to the sort of levels we were seeing a few years ago when mortgage rates were in the 2 per cent range.'
While a 0.25 per cent cut may not drastically change things, Moore suggested that continued reductions this year would begin to have a more noticeable impact.
Stay informed on the financial changes that could impact your repayments!
For a deeper dive into how the RBA’s decision affects mortgage holders, be sure to watch the video below.
In a previous story, we explored how rising costs are affecting senior Australians and their ability to manage day-to-day expenses.
With the RBA’s recent rate change, many are wondering if this will bring the relief they need or add more pressure.
To understand the broader financial impact on seniors, be sure to check out our full coverage on the issue.
With interest rates finally seeing a reduction, how do you think this will impact your mortgage repayments? Share your thoughts in the comments!
