As of 2024, the Cash Rate remains steady at 4.35% after a series of hikes, offering a brief pause in economic uncertainty. Since 2022, the Reserve Bank of Australia (RBA) has actively adjusted the Cash Rate to tackle rising inflation, significantly influencing mortgage interest rates and homeownership costs.
If you are planning to buy a home or refinance in 2025, it’s important to understand where the interest rate is headed and what the experts have to say about it.
Recent Cash Rate
| Date | RBA Cash Rate (%) |
|---|---|
| November 2023 - December 2024 | 4.35 |
| June 2023 - October 2024 | 4.10 |
| May 2023 | 3.85 |
| March - April 2023 | 3.60 |
| February 2023 | 3.35 |
The RBA has maintained the cash rate at 4.35% from November 2023 to December 2024, following several rate hikes earlier in 2023 aimed at managing inflation. Economists predict a decrease in the cash rate starting in 2025, with the Big Four banks forecasting the first cuts between February and May 2025.
The RBA’s Cash Rate adjustments reflect their response to various economic conditions:
- November 2020: The COVID-19 pandemic leads to a record-low Cash Rate of 0.10%, intended to stimulate the economy.
- May 2022: The first hike since 2020, with the Cash Rate rising to 0.35% due to rising inflation.
- July 2022: Inflation surges to 5.1%, prompting a 0.50-percentage-point increase to 1.35%.
- February 2023: The rate reaches 3.35%, from a low of 0.85% in July 2022.
- June 2023: A brief pause with the Cash Rate holding at 4.10%.
- November 2023: Cash Rate holds at 4.35% after a series of increases.
- December 2024: The RBA maintained the cash rate at 4.35% during its December 2024 meeting, marking the thirteenth consecutive month at this level.
This historical snapshot highlights how the RBA adapts its policies based on the economic climate. We can see how rates fell dramatically during the global financial crisis and how they have been raised to fight inflation in recent years.
The pandemic brought another twist as well. Rates were slashed to a record low in 2020 to bolster the economy. However, by 2022 and 2023, inflation was a pressing concern. The RBA responded with a series of eight rate hikes, pushing the Cash Rate from its low of 0.10% in April 2022 to 4.35% by December 2023. The latest increase was in February 2023, with the cash rate held steady at 4.35% through December 2024. These measures further emphasised the RBA’s commitment to curbing inflation, even amidst global uncertainties.
While the future may seem unclear right now, understanding the RBA’s actions and their potential impact on your finances can help you make informed decisions about your home loan and overall financial well-being.
Big Four Banks’ Cash Rate Predictions for 2025
Here’s a breakdown of what the Big Four banks – ANZ, Commonwealth Bank, National Australia Bank (NAB), and Westpac – are predicting for the peak Cash Rate and the timing of potential future cuts:
| Bank | Peak Rate | First Expected Rate | Projected Cash Rate by End of 2025 |
|---|---|---|---|
| ANZ | 4.35% | May 2025 | 3.85% |
| Commonwealth Bank | 4.35% | February 2025 | 3.10% |
| National Australia Bank | 4.35% | May 2025 | 3.10% |
| Westpac | 4.35% | May 2025 | 3.35% |
Detailed Forecast By Experts
Summary of Cash Rate predictions by our Home Loan Experts’ Senior Broker and Manager:
Disclaimer: Predictions made in December 2024.
Should You Wait For Lower Interest Rates To Buy A House?
Interest rate changes can impact your mortgage repayments. Our team of mortgage experts can analyse your current mortgage, explain the potential impact of Cash Rate changes, and explore options that offer more stability. We also have a handy repayment calculator to estimate your new repayments whenever your lender changes your loan’s interest rate.
Please call us on 1300 889 743 or complete our free online assessment form today!
Feeling Uncertain About Rate Predictions? We’re Here To Help!
Interest rate changes can impact your mortgage repayments. Our team of mortgage experts can analyse your current mortgage, explain the potential impact of Cash Rate changes, and explore options that offer more stability. We also have a handy repayment calculator to estimate your new repayments whenever your lender changes your loan’s interest rate.
Please call us on 1300 889 743 or complete our free online assessment form today!