Following last month’s hold, find out, in this special announcement from Legal Home Loans, if the Reserve Bank of Australia has decided to raise, hold, or cut interest rates at its second-last meeting for 2025.
At its September meeting, the board of the Reserve Bank of Australia decided to hold the cash rate at 3.6 per cent, having made a 0.25 per cent cut in August. Today, it has again held the cash rate at its current level.
In a statement, the board said that inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and potential supply closer towards balance. More recently, however, inflation has picked up, it said.
“Trimmed mean inflation was 1.0 per cent in the September quarter and 3.0 per cent over the year, up from 2.7 per cent over the year in the June quarter. This was materially higher than expected at the time of the August Statement on Monetary Policy. Headline inflation rose sharply to 3.2 per cent over the year in the September quarter, a large part of which was expected given the cessation of electricity rebates in a number of states,” the board said.
“The board’s judgement is that some of the increase in underlying inflation in the September quarter was due to temporary factors. The central forecast in the November Statement on Monetary Policy, which is based on a technical assumption of one more rate cut in 2026, has underlying inflation rising above 3 per cent in coming quarters before settling at 2.6 per cent in 2027.”
In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes said that today’s decision to hold the cash rate was “expected, given recent inflation data, however, [it] will provide continued stability for borrowers”.
The current average interest rate range is approximately 4.9 per cent to 5.6 per cent, he continued.
“Property prices are increasing nationwide, so if you’re considering purchasing a property, now is a good time to get your pre-approval in place. With three cash rate cuts in 2025, your borrowing power has likely improved, potentially expanding your options in the market,” he said.
“Having pre-approval ready ensures you can move quickly when you find the right property.”
The recently expanded Australian government 5 per cent Deposit Scheme (formerly the Home Guarantee Scheme) “could add more heat to the market”, Haynes continued.
“The program allows first home buyers to purchase with just a 5 per cent deposit and no LMI, with increased price caps and no income limits,” he said.
“Don’t forget, legal professionals can access certain market advantages that 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.”
Jerome Doraisamy is the managing editor of Lawyers Weekly and HR Leader. He is also the author of The Wellness Doctrines book series, an admitted solicitor in New South Wales, and a board director of the Minds Count Foundation.
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