2025 RBA interest rate tracker: What do rate cuts mean for your home loan?
Changes to the official interest or "cash" rate can significantly impact your personal finances, especially if you have a home loan. At Mozo we track these movements closely and present the latest data we have to help borrowers navigate the market.
The interest rate backdrop:
Australians might have gotten accustomed to low interest rates during the pandemic, but that changed after the Reserve Bank of Australia (RBA) started tightening monetary policy. By the end of 2023, the official cash rate had climbed to 4.35% and remained there throughout 2024.
Prior to that, the last time the cash rate went up was in November 2010, so a shifting interest rate environment has taken some getting used to — particularly among the 1.1 million borrowers who hadn't experienced a cash rate above 0.1%.
Rate cut to 4.10% in Feb: Are more cuts on the horizon?
On February 18 2025, the RBA cut the official cash rate from 4.35% to 4.10%.
This was the first monetary policy adjustment since November 2023, and the first time that the Reserve Bank has cut rates since November 2020.
Higher than usual headline and core inflation has proven hard to tame over the past few years. However, this latest rate cut signals that Australia's central bank believes inflation is moving in the right direction. Media and consumers have been pressuring the RBA to begin a cycle of rate cutting for months. Most pundits expect interest rates will fall further this year, though not to the same degree with which they rose. This has home loan borrowers and first homebuyers a little more optimistic about the months ahead.
The graphs below provide a historical overview of the Aussie mortgage market and details on how lenders have moved their home loan interest rates in response to the RBA.
Which banks have passed on rate cuts to borrowers?
When the RBA cuts the official cash rate, lenders can choose whether or not to pass on the savings they receive to new and existing customers. Some banks reduce rates in full, while others make partial cuts. Some pass on cuts quickly while others delay rate adjustments.
Some make no changes at all.
The table below tracks banks, how much they’ve cut, and when the changes take effect.
Mozo RBA Rate Change Table (Monetary policy February 2025)
| Home Lender | Rate change | Effective date | Expected variable rates from (p.a.) | RBA Match |
|---|---|---|---|---|
| -0.25% | 28 Feb 2025 | 6.14% |
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| -0.25% | 28 Feb 2025 | 5.9% |
|
|
| -0.25% | 28 Feb 2025 | 6.19% |
|
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| -0.25% | 4 Mar 2025 | 6.19% |
|
|
| -0.25% | 3 Mar 2025 | 5.99% |
|
|
| -0.25% | 28 Feb 2025 | 5.89% |
|
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| -0.25% | 18 Feb 2025 | 5.99% |
|
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| -0.25% | 1 Mar 2025 | 5.64% |
|
|
| -0.25% | 28 Feb 2025 | 5.74% |
|
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| -0.25% | 4 Mar 2025 | 5.88% |
|
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| -0.25% | 4 Mar 2025 | 5.68% |
|
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| -0.25% | 4 Mar 2025 | 6.04% |
|
|
| -0.25% | 7 Mar 2025 | 5.93% |
|
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| -0.25% | 4 Mar 2025 | 6.04% |
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| -0.25% | 28 Feb 2025 | 6.04% |
|
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| -0.25% | 5 Mar 2025 | 5.74% |
|
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| -0.25% | 7 Mar 2025 | 5.84% |
|
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| -0.25% | 4 Mar 2025 | 5.89% |
|
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| -0.25% | 12 Mar 2025 | 5.69% |
|
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| -0.25% | 4 Mar 2025 | 5.94% |
|
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| -0.25% | 7 Mar 2025 | 5.74% |
|
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| -0.25% | 4 Mar 2025 | 5.74% |
|
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| -0.25% | 10 Mar 2025 | 5.74% |
|
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| -0.25% | 4 Mar 2025 | 5.79% |
|
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| -0.25% | 4 Mar 2025 | 5.89% |
|
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| -0.25% | 4 Mar 2025 | 5.79% |
|
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| -0.25% | 28 Feb 2025 | 5.89% |
|
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| -0.25% | 1 Mar 2025 | 5.69% |
|
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| -0.25% | 4 Mar 2025 | 5.74% |
|
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| -0.25% | 7 Mar 2025 | 5.74% |
|
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| -0.25% | 5 Mar 2025 | 5.88% |
|
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| -0.25% | 4 Mar 2025 | 5.64% |
|
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| -0.25% | 27 Feb 2025 | 5.64% |
|
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| -0.25% | 4 Mar 2025 | 6.04% |
|
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| -0.25% | 28 Feb 2025 | 5.88% |
|
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| -0.25% | 28 Feb 2025 | 5.74% |
|
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| -0.25% | 7 Mar 2025 | 5.74% |
|
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| -0.25% | 27 Feb 2025 | 5.84% |
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| -0.25% | 21 Feb 2025 | 5.74% |
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| -0.25% | 1 Mar 2025 | 5.75% |
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| 0.0% | 6.44% |
|
Home loan rate change calculator
Use our rate change calculator below to find out how much your mortgage repayments could change with a rate cut. Also head to our home loans hub to compare the latest mortgage deals to see if you could save even more by switching.
Loan details
Repayment change if rates change
Reserve Bank of Australia cash rate
Interest rates are the main tool central banks have at their disposal for steering the economy in a desired direction. Central banks around the world have been lifting interest rates in response to high inflation, and the RBA is no exception.
Over two years from 2022-23, the RBA lifted the cash rate by 425 basis points. It held steady at 4.35% through 2024 and now into 2025, and with inflation more under control, the RBA has cut the rate to 4.10%. It seems as though a series of rate cuts will follow.
When is the next RBA interest rate decision?
From 2024 the RBA board changed its meeting schedule. Instead of meeting on the first Tuesday of every month except January, the RBA board will skip June and October and spread out the meetings more evenly over two days.
This means there are now only be eight interest rate decisions per year, rather than eleven.
RBA rate announcement dates for 2025 can be found on our RBA monetary policy page.
The RBA publishes its cash rate decision at 2:30pm on the second day of deliberations. This includes a statement from RBA governor Michele Bullock. You can read about the announcement and any bank movements by visiting our Reserve Bank interest rates article.
Variable rate home loans
Variable rate home loans are sensitive to RBA interest rate movements. They will usually be priced a few percentage points higher than the RBA’s target because lenders factor in operating costs. If the cash rate goes up, variable rates will too.
The graph below shows the relationship between the cash rate and variable rates for various home loan borrower types.
Average variable rates
5.89%
Lowest variable interest rate in the Mozo database - September 2024.
6.78%
Average variable home loan rate for owner occupiers - September 2024.
$3,464
Initial monthly repayment on a $500,000 loan over 25 years - September 2024.
Fixed rate home loans
Fixed rate home loans are predictive of RBA interest rate movements. Since fixed rates stay the same for their fixed term, lenders set rates based on what they think the RBA will do during that period. If they expect interest rates to rise, so will fixed rates, and vice versa.
The graph below shows the average fixed rates for 1-5 year home loan terms. You can see how they have followed a similar path to the RBA cash rate.
Average fixed rates
6.19%
Average fixed 1 year home loan rate for owner occupiers - February 2025.
6.00%
Average fixed 3 year home loan rate for owner occupiers - February 2025.
6.25%
Average fixed 5 year home loan rate for owner occupiers - February 2025.
Average new loan repayments across Australia
Calculate your home loan repayments
We can show you the monthly repayment amount for a range of loans.
Frequently Asked Questions
What is the RBA cash rate?
The cash rate (also called official interest rates or the policy rate), is the interest rate on 'overnight funds.' These are the funds that banks lend to one another to cover the transactions they have to make on a daily basis.
When the Reserve Bank of Australia moves the cash rate up or down, it tends to shift the economic mood in ways that are believed to affect spending, investment, inflation and employment.
How does the cash rate affect home loan rates?
The cash rate directly affects variable home loan rates, so unless you’ve fixed your mortgage, you can expect your interest rate to increase by roughly the same amount. But the cash rate is one of several things banks have to take into account when pricing their loans. While it serves as a baseline, rates will differ across lenders depending on their business needs (think the cost of staff, branches, marketing, and interest paid out to customers).
When does the RBA announce its decision?
Traditionally the RBA has met on the first Tuesday of every month (except January). It announces any changes to the cash rate at 2:30 the same day. From 2024 however, the RBA began to only meet 8 times a year instead of 11. The Tuesday announcement time remains the same.
How does the cash rate affect the economy?
Households and companies borrow money to spend, so if the cost of borrowing is high, we can expect them to dial down their spending. This impacts business profits, hiring and investment decisions, employment, wages and ultimately inflation.
Will higher interest rates cause property prices to fall?
Higher interest rates have a dampening effect on property prices. This is because the higher cost of borrowing tends to discourage hopeful buyers, particularly first home buyers, from entering the market.
What's are the RBA inflation and employment targets?
The RBA has an inflation target of between 2% and 3%. The RBA typically also places a high priority on achieving full employment, which is when the jobless rate is around 4%.
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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