The RBA has delivered a long-awaited third rate cut for 2025

The board of the Reserve Bank of Australia (RBA) has handed variable rate home loan borrowers some much-needed interest rate relief today, cutting the cash rate by 25 basis points to 3.60% at its most recent meeting.

Economists at the nation’s big four banks all predicted that the RBA would slash rates in August, after the release of June quarter CPI data showed that inflation was within the RBA’s target band for the second consecutive quarter.

What could today’s cut mean for your home loan?

When the RBA cuts the cash rate, banks and lenders typically follow suit by cutting their own home loan variable rates, however, a cut is not necessarily guaranteed, and you may need to wait a few weeks to see the effects of one.

Our live Rate Tracker will provide updates on each bank’s announcements from 2.30pm, so if you want to know whether your bank or lender has cut yet, then you can follow along.

Prior to today’s cut, Canstar’s data insights director Sally Tindall said “if you’ve got a mortgage, don’t bank on any extra cash until it lands in your bank account. The RBA has shown it doesn’t dance to the beat of market expectations — it’s the one steering the ship.”

“Banks are also at the helm of your mortgage and while we expect the big banks to step up to the plate and pass the next cut on in full, there’s no guarantee every lender will do this.”

That said, Canstar research crunched the numbers on an August rate cut, and found that, if a lender was to pass on all three of this year’s rate cuts on full, the average Aussie with a $600,000 variable rate home loan could soon be paying $272 per month less than at the start of the year.

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Source: Canstar.com.au. Notes: based on an owner-occupier paying principal and interest with 25 years remaining in Feb 2025 at the RBA average existing customer variable rate. Calculations assume the banks pass on each cut in full to existing variable customers the month after.

Will the RBA cut rates again in 2025?

All four the nation’s major banks have predicted at least one more cut in 2025, forecasting that the RBA will flash rates again in November, bringing the cash rate to 3.35% by the end of the year.

Westpac and NAB have gone a step further, forecasting another cut at the RBA’s February 2026 meeting, which would bring the cash rate down again to 3.10% in the early months of next year.