Last week the RBA left the official cash rate at 3.60%, echoing a “meeting by meeting” approach due to mixed data. Governor Bullock noted that some inflation measures have ticked up unexpectedly. The RBA said underlying inflation’s decline has slowed, and private demand is firming as incomes rise. In short, policy is cautious: there’s room for more data before any decision on future cuts.
Market Reactions Were Immediate
Financial markets reacted quickly. The Aussie dollar ticked higher (around $0.66) on the news, while bond yields rose. Local shares eased – the ASX200 ended slightly down (about 1%) after the RBA update. Futures pricing now shows only around a 35–40% chance of a November rate cut, down from roughly even odds before the meeting.
Meanwhile, RBA Governor Michele Bullock was blunt about housing. She described Australia’s property market as “very, very difficult” for buyers right now. But she reiterated that the RBA’s job is targeting inflation, not home prices. The big fix for housing will take time: supply shortages are structural and won’t ease overnight. In fact, she warned that even with government action, any improvement in housing affordability is likely years away. The key takeaway is that low rates alone aren’t solving high home prices.
What Borrowers Should Do Now
For starters, it’s a good idea to review your mortgage. For example, some financial commentators suggest that variable rates above roughly 5.5% may be higher than necessary for certain borrowers, though individual circumstances vary and different lenders offer different features. A free loan health check can help you compare your current rate and loan features to other deals on the market. A broker can also look at your loan structure – for example, whether splitting some debt to a fixed rate could provide short-term stability.
Note: Note: This information is provided as general guidance and does not constitute personal financial advice. Borrowers should consider their own situation or speak to a licensed professional before making decisions.
Think in scenarios: model your budget under two cases. One scenario assumes rates stay here, another if there’s one more 0.25% cut. This helps you see your repayments in both worlds. Either way, focus on cashflow tactics: use offset accounts or redraw to save interest, consider splitting part of your loan into a fixed rate, and keep repayments smooth and consistent. Any extra savings can help buffer higher payments down the track.
Don’t Rush Into Buying – Be Smart
Maintain discipline around pre-approval and home buying. A rate hold is not a cue to rush off-the-plan, house prices aren’t guaranteed to fall and competition remains fierce with tight supply. If you’re saving for a deposit, keep it steady and check in with a broker before auction time. Agents are still seeing multiple bids on well-priced homes, so be ready but don’t overextend.
Stay Safe and Keep a Buffer with Be Smart Finance
Finally, mind the risks. Stick to serviceability requirements, keep a buffer (we like 1–2% extra than your current rate), and finish any big loan renovations in stages. Since further cuts aren’t certain, ensure you can handle rates a little higher for now. Our advice as brokers is to stay informed – we’ll guide you through any RBA moves.
What now? Be Smart Finance is here to help. Whether you’re a first-home buyer or an investor, we’ll crunch the numbers on your borrowing power and compare loan options. We’ll walk you through rate changes and help lock in the smartest structure for your needs. Call our team at 0408 659 819 or book a free 30-minute chat to discuss your home loan strategy. Let us help you navigate these rate changes with confidence.
