What’s happening with interest rates?

After 13 cash rate rises starting in May 2022 – raising the official cash rate increase from 0.10% to 4.35% – the Reserve Bank of Australia (RBA) made its first cuts in February and May 2025, bringing the cash rate down to 3.85% 

At its July 2025 meeting, the RBA chose to hold the cash rate steady.

The RBA, which meets eight times per year, will assess a range of data before making any further cash rate decisions.

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Rate changes for Owner Occupier Variable

Home Loan Rates

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Table last updated 1 July 2025. Table sort order based on latest known owner occupier variable rate change by big four banks, then alphabetically. Excludes intro rates, green or eco loans. Lowest rates listed reflect current variable interest rates, minus 25 basis points unless specified by the lender.

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Why do interest rates change?

The Reserve Bank of Australia (RBA) is Australia’s central bank. The bank and its Monetary Policy Board must follow a specific charter, which includes maintaining stable employment and keeping inflation, specifically ‘trimmed mean’ inflation, within what’s called the ‘target band’ of 2% – 3%.

The RBA’s only tool to maintain stability is raising or lowering the cash rate. The Monetary Policy Board meets regularly to assess a large range of data and make a decision to hike, hold or cut the cash rate.

The increases to the cash rate, which started in May 2022, were due in part to a significant rise in the level of inflation for Australia, which was tracking at a headline rate of 7.8% in the December 2022 quarter – far higher than the target band.

While the level of inflation has lowered over time, the Board has maintained a close eye on other economic activity and results, with a clear directive that the cash rate will only be cut when it believes the level of trimmed mean inflation will return to 2% – 3% sustainably.

How do cash rate changes impact your home loan?

The cash rate, which is set by the Reserve Bank of Australia (RBA), is essentially the rate of interest that banks and lenders have to pay when they borrow money from other banks or lenders. 

When the cash rate goes up, so does the amount of interest banks have to pay. This impacts the amount of money that you, as their customer, will then have to pay for borrowing from them in the form of a loan.

How many rate cuts could Australia see in 2025?

There is no guarantee for the timing or number of rate cuts in 2025. There is no guarantee for the timing or number of rate cuts in 2025. The RBA will need to assess a variety of data before making any further decisions. Forecasts from the big four banks will be updated as they are published.

How can I compare home loans? 

If you’re looking for a low fixed or variable rate for a new home loan or to refinance, you can compare home loans with Canstar.

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