When will interest rates go down in 2025?
The RBA has cut the cash rate three times so far this year, but now the question is whether the cuts will continue through 2025.
03 Oct 2025
The RBA has cut the cash rate three times so far this year, but now the question is whether the cuts will continue through 2025.
At its February 2025 board meeting, the Reserve Bank of Australia (RBA) board cut the cash rate by 25 basis points to 4.10%. This was the first change in 15 months, and was followed by another 25 basis point cut in May and a further one in August, bringing the cash rate to its current level of 3.60%.
The recent cash rate cuts signal the start of some relief for home loan borrowers, with banks and lenders around Australia announcing home loan interest rate cuts, and home loan refinances at an eighteen-month high. That said, it remains to be seen whether and by how much the bank’s board will cut again later in the year.
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When do the big four banks think rates will go down?
Economists at Australia’s major banks had speculated that there would be at least one further cash rate cut in 2025, but following the latest CPI data and comments from RBA Governor Michelle Bullock, most have now revised this position. Westpac is currently the only one of the big four still predicting a move this year.
The board will announce its next cash rate call on Tuesday November 4, 2025, but in the meantime, here’s what the big four banks are forecasting.
ANZ: No further cuts in 2025
ANZ predicts a 25 basis point cut in February, taking the cash rate to 3.35% by the start of 2026.
Commonwealth Bank: No further cuts in 2025
Commonwealth Bank predicts a 25 basis point cut in February, taking the cash rate to 3.35% by the beginning of 2026.
NAB: No further cuts in 2025
NAB predicts a 25 basis point cuts in May of 2026, taking the cash rate to 3.35% by the middle of next year.
Westpac: Three further cuts in 2025-2026
Westpac predicts a 25 basis point cut in November 2025, and two further cuts in February and May 2026, taking the cash rate to 2.85% by the middle of 2026.
Will Trump’s tariffs affect interest rates in Australia?
While it’s too soon to tell what affect US president Donald Trump’s tariffs will have on Australian interest rates, the RBA’s board has said that it is considering a wide range of possible scenarios.
In its May 2025 Statement on Monetary Policy, the board of the RBA said that it anticipates a reduced demand for Australian exports thanks to slowing global growth, but that this might be “mitigated” by Chinese fiscal stimulus.
Governor Michele Bullock said that the current situation for Australia is “unpredictable” in the face of possible global economic uncertainty. “I’m not putting a strong possibility on a really, really bad outcome, but I think we have to be alert that there might be,” she said.
When does the RBA board meet next?
The board of the RBA has changed its meeting schedule in 2024. Where it used to meet on the first Tuesday of each month, excluding January, it now meets eight times a year, for two days at a time. The rationale behind this altered schedule is to give the board more time to consider its decisions. The meeting dates for the RBA board in 2025 are as follows:
- 17–18 February
- 31 March–1 April
- 19–20 May
- 7–8 July
- 11–12 August
- 29–30 September
- 3–4 November
- 8–9 December
The RBA’s next cash rate announcement is due on Tuesday November 4.
This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.
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