On 18 February 2025, the Reserve Bank of Australia cut the cash rate from 4.35% to 4.10%—its first reduction in over four years. At Dhaliwal Finance, we believe this is great news for mortgage clients and property investors alike.
Why the Rate Cut?
Easing Inflation: Inflation has dropped to around 3.2% by December 2024, moving closer to the RBA’s target range of 2–3%.
Slower Domestic Demand: Cautious spending by households and businesses has helped ease inflationary pressures.
Stabilising Labour Market: Even with a slight increase in unemployment, wage growth has moderated, giving confidence that inflation will remain under control.
What This Means for You
For Property Investors:
Increased Borrowing Capacity: Lower rates mean you may be able to borrow more. For example, single-income borrowers might see an increase of around $7,900, while dual-income couples could gain up to $18,500 in additional borrowing power.
Market Activity: With more buyers entering the market, property prices may see upward pressure—especially in high-demand areas—creating both opportunities and challenges.
For Home Buyers:
Lower Mortgage Costs: As banks pass on the rate cut, mortgage rates are expected to drop. This could mean lower monthly repayments and improved affordability for those looking to buy or upgrade their home.
Boost in Confidence: Cheaper borrowing costs can boost buyer confidence, making it a good time to reassess your options or even consider refinancing.
What’s Next?
This rate cut marks a turning point for the Australian economy and property market. Whether you’re a first-time buyer, looking to invest, or considering refinancing, it’s important to review your borrowing capacity and keep an eye on market trends. At Dhaliwal Finance, we’re here to help you navigate these changes and find the right loan solution for your needs.
If you have any questions or would like to discuss how this rate cut could benefit you, please get in touch. We’re always here to help you unlock your future with clear, personalised advice.
Key Takeaways:
The cash rate is now 4.10% (down from 4.35%).
Borrowing capacity may increase for both home buyers and property investors.
Lower rates can lead to more affordable mortgages and boosted buyer confidence.
At Dhaliwal Finance, we’re dedicated to helping you make informed decisions in this evolving financial landscape. Reach out today for a free consultation and let’s explore your best options together! #interestrates #mortgagetips #mortgagebroker #homeloans #australia