From rate hikes to relief: What the RBA’s February rate cut means for you
After nearly 3 years of rate hikes, the Reserve Bank of Australia (RBA) has finally pressed pause – and for the first time since 2020, interest rates are trending south. If you’re a homeowner, or looking to buy or sell, you’re probably wondering: Does this change anything for me? To find out, we sat down with Daniel Hustwaite, Principal at AQUA Financial Services. Spoiler alert: it’s good news all around! But only if you know how to make the most of the opportunity.
.jpg)
A long time coming: The cut we’ve all been waiting for
The past few years have felt like a test of endurance – for buyers, sellers and homeowners alike. That’s thanks to the RBA, which raised interest rates a tear-jerking 13 times since 2022 to cool inflation. But now, with inflation easing and economic growth slowing, it’s shifting gears.
In February, the RBA cut the official cash rate by 0.25% to 4.10% – its first reduction since November 2020.
‘This is the first real sign of relief for borrowers,’ says Daniel Hustwaite, Principal at AQUA Financial Services. ‘It’s the RBA saying, “Okay, we’ve done enough for now – let’s stimulate some economic activity again.’”
But here’s the thing: the RBA sets the cash rate, not your mortgage rate.
So, before you start planning how to spend those extra dollars each month – or take out a bigger loan to purchase your dream property – there’s an important question to ask: Will your bank actually pass the cut on to you?
Tricky business: How to ensure your bank works in your favour
The short answer on whether banks will pass down the interest rate cut to borrowers? They should. But that doesn’t mean they will.
‘Banks don’t always pass on the full rate cut straight away,’ Daniel explains. ‘Some – including the Commonwealth Bank, ANZ, NAB and Westpac – have. But others will hold back a portion, which means you could end up with less savings than you expect.’
If your lender does pass it on, the savings can be significant. For a $750,000 mortgage, a 0.25% cut could mean an extra $120 per month in your pocket – or over $1,400 a year.
But what if your lender isn’t playing ball?
‘Then, you’ll have to pick up the phone,’ Daniel advises. ‘Call your lender and ask the question: Are you passing on the full rate cut? And if not, why not?’
And if they’re stubborn? You have options.
First, ask for a better rate. Failing that, Daniel’s advice is to refinance. ‘Consider switching to another bank offering lower rates. I recommend connecting with your broker to get support. They can help you shop around for better deals across multiple lenders.
‘Remember: the smartest borrowers don’t just accept what their bank gives them. They make sure they’re getting the best deal possible.’
New rates, new market: The good news for buyers
Over the past 2 years, high interest rates have affected the residential real estate market in different ways. Buyers have been more cautious, and investors’ borrowing power has been squeezed.
But that dynamic looks like it may change.
‘Lower rates often leads to more activity in the market,’ Daniel explains. ‘Buyers who have been sitting on the sidelines suddenly feel more confident as their borrowing power increases, leading to a rise in demand. That often translates into stronger sale prices.’
So, what does that mean for you?
If you’re a buyer, expect more competition. Particularly from first-home buyers and investors who now find it easier to qualify for loans. With borrowing costs coming down, affordability is improving.
But that doesn’t mean putting your home ownership dreams on hold.
‘Buyers who act early often have the advantage,’ Daniel advises. ‘Getting in now could mean more choice and better value before demand really picks up.’
No sweat, just sales: A silver lining for sellers
Of course, what’s good for buyers can be just as promising for sellers.
With more buyers entering the market, demand is set to rise. That means if you’re a seller, you could soon see stronger competition for your property.
‘We often see a wave of activity when confidence returns to the market,’ Daniel says. ‘And with more buyers feeling optimistic, sellers can take advantage of renewed demand.’
So, if you’ve been on the fence about selling, now is the time to start preparing. Ensuring your property is well-presented and ready for sale could put you in the best position to capitalise on this shift.
The bottom line? The market could be moving – and those who act early often get ahead of the curve.
A rare shift: Why timing – and the right advice – is key
This rate cut isn’t just a number – it’s the biggest shift in the property market in years. Buyers are watching. Sellers are reconsidering. And banks? They’re making their moves, too.
Whether this change works in your favour comes down to one thing: timing. Because the smartest property decisions aren’t made in hindsight – they’re made by those who read the signs early and act with confidence.
Not sure where to start? It’s time to chat with an expert, whether that’s a broker or an estate agent. After all, the smartest property moves start with the right advice.