RBA reduces Cash Rate to 1.25%

RBA reduces cash rate to 1.25%

After months of speculation around a cut to the cash rate, the RBA has cut the official cash rate to a new record low of 1.25%.

It is now expected that a raft of lenders are now expected to follow with rate cuts of their own. Some lenders will pass on the full 0.25% while others may cut the rate by less.

What does 0.25% drop in interest rate mean for mortgage payers?

Loan amount examples Likely decrease in repayments
$150,000 $31.25 per month
$250,000 $52.08 per month
$350,000 $72.91 per month
$450,000 $93.75 per month
$550,000 $114.58 per month

Why drop the Cash rate?

In making this decision the RBA has taken into account inflation being below its target range of 2-3%, continued pressure on house prices, evidence of rising levels of mortgage stress, a borrowing squeeze in response to the Banking Royal Commission, slow wages growth and continued concerns around the level of under employment.

If you are unsure how these changes will affect your individual circumstances, click here to contact us today.