No cuts for November, as more RBA rate relief out of sight until 2026

It’s safe to say that absolutely nobody was betting on a rate cut today, with recent CPI figures all but guaranteeing that the Reserve Bank of Australia would hold the cash rate steady at its current level.

This is indeed what played out, with the bank’s board announcing this afternoon that the cash rate will remain at 3.60%, and economists at the nation’s major banks now predicting we won’t get rate relief until the new year, if at all.

When will interest rates go down?

A few months ago, economists at all four of the nation’s big four banks had predicted a rate cut in November, but in recent weeks, the outlook became less encouraging, with the recent release of CPI figures for the September quarter being the final nail in the coffin.

The big banks are now split on whether we’ll see another rate cut at all in the next few months. ANZ is the most optimistic of the four,  predicting a 25 basis point cut next February, while NAB predicts one in May.

Westpac predicts 25 basis point cuts in May and August, while Commbank is the most pessimistic, with no cut at all currently forecast.

How could a future rate cut look?

When the RBA cuts the cash rate, banks and lenders tend to cut their own variable home loan rates by an equivalent amount, meaning that cash rate cuts can lead to extra money in the pocket each month for home loan borrowers.

Canstar Research crunched the numbers to see how predicted cuts next year could impact your mortgage.

If ANZ ‘s prediction of a February rate cut comes to pass, an owner-occupier with a $600,000 mortgage and 25 years remaining would see their minimum monthly repayments drop by $87, assuming banks pass it on to their variable customers.

An owner occupier with a loan of $750,000 in the same circumstances could see repayments drop by $108 a month, while someone with a loan of $1,000,000 could see monthly payments fall by $144.