The Reserve Bank of Australia has cut the cash rate by 25 basis points to 3.6 per cent, its third reduction in six months, which is expected to save borrowers with a $600,000 mortgage about $90 a month.
It’s the lowest rate since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent. The decision follows softer inflation and jobs data, after the board unexpectedly held rates steady in July.
Economists say the cut will boost borrowing power and fuel housing demand. According to Domain, the cut will lift borrowing power for households earning $50,000 a year by $4,000 annually, while double-income households on $400,000 will be able to lift their loan limit by an extra $49,000. Domain forecasts house prices to rise six per cent and units five per cent by mid-2026.
