RBA Cash Rate Held At 3.60%

Why Did The RBA Hold The Cash Rate In September 2025?

It was unanimously decided to keep the cash rate unchanged at 3.60%.

The decision comes as inflation has fallen sharply since its 2022 peak, but is now proving a little stickier than expected. Both headline and trimmed mean inflation were back in the RBA’s 2–3% target range in June, but early signs suggest the September quarter could be hotter than previously thought.

At the same time, the economy is showing mixed signals. Household spending is starting to bounce back as real household incomes improve, financial conditions ease, and the housing market strengthens. Unemployment is steady at 4.2%, wages growth has cooled, but productivity remains weak.

Globally, uncertainty is still high. Trade tensions and other geopolitical risks could weigh on growth, while stronger household demand at home could push inflation higher again.

Faced with these competing pressures, the RBA has chosen to pause and wait for more data before making its next move.

Our Experts Take On The Board's Decision

Here is what our experts say about the cash rate decision and what it means for borrowers.

No surprises here – if the RBA’s unsure, they hold. This isn’t caution, it’s confusion. They’re waiting for more clarity on inflation and wages before making their next move. But make no mistake: The direction from here is likely down.

Otto Dargan, CEO of Home Loan Experts

It was a hold, just as expected. I felt confident the RBA would hold fire here, noting the recent inflation data. My feeling is that the board will probably want to assess the situation further before enacting more rate cuts, so we need to be patient and see what the next few months bring.

I have particular concerns about the hot property market and recent CPI data. We should also see how the more-expensive H1B visa in the US affects potential future immigration to Australia. It could cause more migration to Australia and, therefore, increased demand.

If we add a lot of future demand, then that may spark some inflation, which could put a halt to further cuts for the moment.

Jonathan Preston, Senior Mortgage Broker

So what does it mean for homeowners?

For now, repayments may remain unchanged. But lenders are already adjusting their fixed rates independently of the RBA, which could create opportunities to refinance at a lower rate.

Dargan explains, “For homeowners, now’s the time to play offence. We’re seeing lenders drop fixed rates behind the scenes, which usually signals the market’s betting on rate cuts soon. If you’re on a variable, start looking for a sharper deal. If you’re buying, get your pre-approval locked in now, don’t wait for the crowd to rush in.”

“We’re already seeing a rise in pre-approvals, especially in Sydney and Melbourne, and a shift in tone from ‘wait and see’ to ‘let’s move’. The buyers who prep now will be the ones buying before prices pop.”

How The RBA Cash Rate Affects Interest Rates

Lenders add a margin to the official cash rate to determine the variable interest rate they offer to customers.

When the RBA raises the cash rate, lenders often increase their variable interest rates. This means your mortgage repayments go up.

When the RBA cuts the cash rate, lenders may lower interest rates. So, your repayments could go down. However, note that not all lenders pass on the full change.

If the cash rate is unchanged, your repayments usually stay the same. However, lenders can still change rates for other reasons.

Use our rate change calculator to find out what your repayments should look like whenever the cash rate changes.

Upcoming RBA Monetary Policy Board Meeting Calendar 2025

Source: rba.gov.au