Waiting for the RBA to lower the cash rate? Here’s what to keep in mind

With the Reserve Bank of Australia (RBA) meeting today, many are eager to see what comes next. While most experts expect the cash rate to stay on hold, Commonwealth Bank (CBA) has now shifted its forecast for a rate cut from November to December, with other major bank economists predicting early 2025.

Interestingly, some banks have already factored in multiple cuts into their 2-year fixed-rate mortgages and beyond. Locking in a fixed rate might offer some stability, but it’s worth considering that future variable rate cuts could bring further savings.

It’s important to remember that a low rate isn’t everything. The right loan should align with your personal situation. For example, if you’re expecting a financial windfall, a fixed loan without offset features might limit your ability to reduce debt in the long run.

Recently, I’ve been working with clients to explore different scenarios—whether that’s upgrading, buying an investment property, or adjusting to new financial circumstances. It’s all about finding the option that works best for your needs.

If you’re thinking about your options, it could be helpful to take a closer look at the numbers for each option.

Published Monday 23 September 2024