It's the news we've all been hanging out for—mortgage rates are officially set to drop. The Reserve Bank of Australia (RBA) has made its much-anticipated move, trimming the cash rate by 25 basis points to 3.6%.

The build-up has been brewing for months. A surprising rise in the unemployment rate to 4.3% in June, paired with soft economic indicators, has nudged markets - even the RBA - toward action. In fact, according to a recent Reuters poll, economists are virtually unanimous that a cut is on the way in August, followed by another in the next quarter.

Mortgage Relief Is Finally Here - RBA to Cut Rates

What Does This Mean for Your Finances?

If you’re on a variable-rate mortgage, your monthly repayments could drop by around $100 per $400k loan, with potential savings stacking up to $1200+ per year. For the average Aussie home loan of $640k, this could translate to even bigger savings—hundreds of dollars each month.

But! It's important to keep in mind:

• Pass-through lag: Banks may take a few weeks to reflect the RBA’s decision in your home loan rate

• Fixed-rate loans: These won’t be affected until your term ends. You can stay put or consider refinancing

• Data-dependent easing: The RBA will be watching inflation closely—sustained drops could pave the way for further cuts; a rebound could keep rates steady

The Golden Rule for Borrowers

Now that the announcement has been made, check your lender’s reaction, and compare fixed/variable deals post-cut.

Every dollar you save can help shape your financial future—whether it means faster mortgage payoff, extra savings, or that holiday fund you've been dreaming of.

Hero image: Reuters

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