The Reserve Bank of Australia has cut interest rates by 0.25 per cent in a major win for mortgage holders.
The cash rate now sits at 3.60 per cent.
All eyes are on lenders, who are expected to pass on the anticipated cut.
“Following recent rate cuts by the Reserve Bank of Australia (RBA), lenders are under immense pressure to pass the savings on to customers. So far, most have passed on the cuts in full,” said Graham Cooke, Head of Consumer Research at Finder.
“Experts are forecasting more rate cuts, which could change things. Lenders might start to pull back and offer smaller cuts to customers, as we observed during the last round of cuts.
“In a competitive market, lenders are fighting for business, which is a good opportunity for you to review your home loan.
“If your current mortgage rate is higher than 5.5 per cent, you may be able to find a better deal.”
According to Finder, the average single Australian can now feasibly afford a place for $570,000 or less and the average Australian household with two incomes can look at suburbs where average prices are under $1,167,000.
In NSW, a couple with two average incomes can now afford a house in Oran Park, Marsden Park, Glenmore Park, and Leppington.
When it comes to units, the average Australian on a single income can now afford suburbs in Bankstown, Penrith, and Auburn.
Cooke said rate cuts make mortgages more affordable, and it’s encouraging to see more suburbs fall within reach for buyers.
“Even with a lower rate, you’ll still need a hefty deposit,” he said.
“If lower borrowing costs drive increased market activity – as they have in the past – rising property prices and higher deposit requirements could ultimately outweigh the benefit of cheaper repayments.”
Troy Dodds is Parra News' Managing Editor and Breaking News Reporter. He has more than 20 years experience as a journalist, working with some of Australia’s leading media organisations. In 2023, he was named Editor of the Year at the Mumbrella Publish Awards.