Date: 12 August 2025
Source: Reserve Bank of Australia (RBA), AP News, The Guardian, The Australian
The Reserve Bank of Australia (RBA) has announced a 0.25 percentage point cut to the official cash rate, reducing it from 3.85% to 3.60%. This marks the third interest rate reduction in 2025.
The decision comes as Australia’s inflation continues to ease, with the Q2 Consumer Price Index (CPI) at 2.1% and the “trimmed mean” measure at 2.7% – both within the RBA’s target range. The labour market is also showing signs of cooling, though the RBA noted ongoing uncertainties in the economic outlook.
Why the RBA Made This Move
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Inflation pressure has eased: Price growth has slowed more quickly than expected.
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Labour market softening: Unemployment is edging up, reducing wage-driven inflation risks.
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Productivity concerns: The RBA revised down its long-term productivity growth forecast from 1% to 0.7%, signalling potential structural challenges ahead.
Impact on Homeowners and Borrowers
If lenders pass on the full rate cut:
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A A$700,000 home loan could see annual savings of around A$1,100.
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A A$500,000 mortgage could see monthly repayments drop by about A$74.
(Source: Canstar, The Guardian, Courier Mail)
Winners and Losers
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Winners: Borrowers, homeowners, and those planning to refinance may benefit from lower repayments.
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Losers: Savers and retirees relying on interest income will likely see reduced returns on deposits.
What This Means for You
With the cash rate now at its lowest point since early 2023, borrowers have an opportunity to review their mortgage terms and consider refinancing to lock in more competitive rates. However, market conditions remain uncertain, and future RBA decisions will depend on inflation trends, employment figures, and global economic developments.
For personalised mortgage reviews and refinancing solutions:
Call/WhatsApp: +84 96 275 92 07
Email: support@sw-globalfinance.com.au