With only one more rate decision left from the Reserve Bank of Australia (RBA) for 2024, many homeowners are hopeful for a summer rate cut. Let’s explore when rates might start to fall—and how you could potentially secure a rate cut before Christmas.
“Are we there yet?” While usually a question on a summer road trip, it also captures how homeowners feel about the long-awaited rate cuts. The good news? We’re getting closer, with numerous banks predicting a possible RBA rate reduction by the end of summer.
Rates Held Steady in November
Despite a drop in inflation to 2.8%—comfortably within the RBA’s 2-3% target—the RBA decided to hold rates steady in November. So, why the wait for a cut?
The RBA has expressed concerns that some of the inflation reduction is due to “temporary cost-of-living relief” measures, such as the recent $300 power bill credit. Essentially, the RBA is wary that inflation might still be high enough, and the economic outlook uncertain enough, to justify holding off on rate cuts for now.
Banks Forecast Early 2025 Rate Cuts
The RBA’s aim is to “sustainably return inflation to target.” Given this cautious approach, a festive season rate cut at the next RBA meeting on December 10 seems unlikely.
RBA Governor Michele Bullock has refrained from hinting at rate direction, but banks remain optimistic. Commonwealth Bank, which initially projected a December cut, now suggests February 18 as the likely date for the first of potentially several cuts. Westpac, ANZ, and AMP are also forecasting a February cut, while NAB anticipates a reduction as early as March 2025.
Why Wait? Variable Rates Are Already Falling
While a February rate cut could bring a happy start to 2025, it may feel too far off for those eager for relief. The good news is that you might not need to wait for the RBA’s decision.
With growing expectations of future rate cuts, some lenders have already started lowering their variable rates, with some dipping below the 6% mark. According to Mozo, these reductions have contributed to a 2.1% increase in home loans in Townsville, Brisbane, Gold Coast, Sunshine Coast in Queensland, Australia being refinanced over the past month.
Talk to Us Today
Waiting can be frustrating, especially when it comes to potential savings. Refinancing in Townsville, Brisbane, Gold Coast, Sunshine Coast in Queensland, Australia now could ease your household budget and add a little extra holiday cheer.
If you’re interested in exploring how refinancing could benefit you, contact us for a review of your current home loan. As your mortgage broker in Townsville, Brisbane, Gold Coast, Sunshine Coast in Queensland, Australia, we’ll assess your situation and help you find ways to save on your home loan interest rate.
To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au.
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