Good news for Sydney’s mortgage holders as the RBA delivered its second cash rate cut of the year, lowering the official rate to 3.85% following today’s 0.25% reduction.
‘Data on inflation for the March quarter provided further evidence that inflation continues to ease,’ was today’s message from Martin Place after the RBA board met.
‘At 2.9 per cent, annual trimmed mean inflation was below 3 per cent for the first time since 2021 and headline inflation, at 2.4 per cent, remained within the target band of 2–3 per cent.’
However, the RBA predicts underlying inflation to rise this year to be ‘around the midpoint of the 2–3 per cent range throughout much of the forecast period.’
The RBA has now dropped the official cash rate from 4.35% to 3.85% in just three months – a strong shift which shows that persistently high inflation might have been conquered.
Some economists argued the rate should have been cut in April, but with a federal election campaign underway, the RBA dodged accusations of politicising its decision.
Encouragingly, inflation for the March quarter came in within the RBA’s preferred 2–3% band. That gave the board confidence to move today.
For Sydney homeowners, today’s cut could translate to mortgage savings of between $90 and $150 per month depending on loan size and terms.
In fact, a new Finder survey shows 19% of mortgage holders plan to refinance in the next six months, equating to around 627,000 loans.
And lender competition is heating up.
Bank Australia recently trimmed its three-year fixed Clean Energy Home Loan rate by 0.20% to 4.94% – the lowest fixed rate on trusted review site Canstar’s database, though limited to qualifying green homes.
Macquarie Bank followed with a 0.20% cut on its two- and three-year fixed rates, bringing them to 5.19%. And Aussie Home Loans made the boldest move, slashing fixed rates by 0.50% across selected products.
Of the Big 4, Commonwealth Bank pre-empted today’s announcement with a cut to its variable rate, now 5.84%. Westpac and ANZ have followed suit, pushing the major banks into more competitive territory.
Currently, around 35 lenders are offering variable rates below 5.75%.
However, as always, there was a cautious tone today. ‘‘The Board will be attentive to the data and the evolving assessment of risks to guide its decisions.
‘In doing so, it will pay close attention to developments in the global economy and financial markets,’ noted the RBA.
If you are considering reviewing your current arrangements, reach out to Mortgage Broker Sydney.
Our friendly brokers can meet you wherever is most convenient: your home, office, or a local cafe.
In addition, we are here to guide you on various strategies such as uncovering lower rates, enhancing savings, consolidating debts, and alleviating the impact of rising household prices.
Michael began his career in the finance industry over 35 years ago. He progressed through the ranks at the CBA in both retail and corporate lending, culminating in a senior position as a Corporate Relationship Executive. His decision to leave the bank in 2003 to become an independent mortgage broker was driven by his desire to assist everyday customers break through the jargon of the banking world and access the best loan products in the market. His experience is wide-ranging from helping first time buyers to large commercial enterprises. What Michael doesn’t know about home loans, simply isn’t worth knowing!