In its May cash rate meeting today (Tuesday, 20 May), the board of the Reserve Bank of Australia has decided to cut the cash rate by a further 0.25 per cent.

In a statement following the cut, the board said: "In a statement following the cut, the board said: "Staff forecasts released today project that while headline inflation is likely to rise over the coming year to around the top of the band as temporary factors unwind, underlying inflation is now expected to be around the midpoint of the 2–3 per cent range throughout much of the forecast period."

"Uncertainty in the world economy has increased over the past three months and volatility in financial markets rose sharply for a time. While recent announcements on tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries. Geopolitical uncertainties also remain pronounced. These developments are expected to have an adverse effect on global economic activity, particularly if households and firms delay expenditure pending greater clarity on the outlook. This has also contributed to a weaker outlook for growth, employment and inflation in Australia."

In conversation with Lawyers Weekly, Legal Home Loans general manager Aylin Unsal said the decision was “welcome news for mortgage holders and prospective buyers”.

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“As banks pass on the rate cuts, those on a variable home loan set up will see their monthly interest repayments decrease. If you haven’t received a reduction in your repayments from the February cash rate cut, make sure to get in contact with your lender or broker as soon as possible,” she said.

“For an owner-occupier with a $600,000 debt and 25 years remaining on the loan, a 0.25 percentage point cut could see monthly repayments drop by $91 to existing variable rate borrowers. The current average interest rate range is now 5.1 per cent to 5.9 per cent. If your rate is still over 6 per cent, reach out to our lending experts here as a priority.

“If you’re considering purchasing a property, now is a good time to get your pre-approval in place. With two rate cuts, your borrowing power may have increased, potentially expanding your options in the market. Having pre-approval ready ensures you can move quickly when you find the right property.

“Don’t forget, legal professionals can access certain market advantages, such as home loans with just a 10 per cent deposit and waived lenders mortgage insurance. These benefits can make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for lawyers to gauge what’s best for you.”