RBA Drops Rates Again!
- pdavey100
- Aug 13, 2025
- 2 min read
You will likely be aware that the Reserve Bank of Australia (RBA) reduced the Cash Rate today by 0.25%. The Cash Rate now sits at 3.60%. Still a long way off the 0.1% it was back in early 2022. It's looking pretty neutral here, but I'd wager we'll get more cuts.
The big banks have already made rate cut announcements, with their variable rates to be cut by 0.25% ...
NAB 25 Aug
Westpac 26 Aug
CBA 22 Aug
ANZ 22 Aug
Bankwest 22 Aug
Suncorp 22 Aug
Macquarie 15 Aug
Others, like MyState, AMP, Qudos etc will cut in the next day or so.
Loan Structuring / Money Saving Advice!!
I want to bring your attention to Fixed Rates. The fixed rate market has been quietly falling over the past year or so and is starting to reach levels that are looking pretty tasty.
One and two year fixed rates are worth a look ...
1-year rates start at 5.19%
2-year rates start at 4.99%
Fixing a portion of your loan now or some time in the near future may not be the silliest idea. Give me a shout to talk through your options and what will be best for you.
Saving $$ by lower variable rates, or jumping on an even lower fixed rate, is a good thing. Even better when you recycle those savings back into the loan (using redraw or your offset account).
Say you have a $650,000 loan at 5.79% over 30 years. Your monthly repayment is currently $3,809.
Your variable rate falls to 5.54%. Your new monthly repayment can adjust to $3,706/m. A saving of $103 per month ... or about $37,000 over the 30 year life of the loan.
Now, if you recycle the $103 per month back into your home loan, then you'll reduce your effective loan term by almost 2 years; saving c. $53,000 in interest over the life of the loan.
That's the power of compound interest.
It gets better. If you were to fix 50% of your loan on a 1-year rate you'd save even more.
eg. $325,000 @ 5.54% variable and $325,000 @ 5.19% 1-yr fixed = $3,635 per month. That's $174 saved per month.
Recycle that $174 back into the variable rate loan (redraw or offset) and you'll knock more than 3 years off your loan term and save more than $80,000 in interest. Nice
Get in contact with me if you want to discuss how to smarten up your mortgage and deprive the poor banks of exorbitant profits.
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