Home loan watch: when will interest rates come down again? Expert forecasts explained

By Peter Terlato · · 4 min read
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Key Points

  • The cash rate fell to 4.10% after the February 2025 monetary policy meeting. 
  • The RBA says the tight labour market and risk of disinflation stalling could delay further cuts.
  • All Big Four banks will be passing on the full rate cut to variable home loan customers.
  • The timing of further rate cuts remains speculative – possibly later this year or even 2026.
Collage of a woman walking down a descending graph line.

The Reserve Bank of Australia (RBA) maintains that its number one enemy is inflation. If inflation stays high, so will home loan interest rates. For households experiencing mortgage stress, a cut to the cash rate may see their variable rates reduced - which, for some, can't come soon enough.

On Tuesday 18 February 2025, Australia's central bank cut the official cash rate by 25 basis points – bringing it down from its 13-month peak of 4.35% to 4.10%.

When will the RBA cut rates again?

Both sticky inflation and, subsequently, the RBA's decisions defied expectations in 2024, leading many economists to adjust their cash rate cut calls further and further into the future.

However, now that the RBA has cut the cash rate in 2025, banks and market commentators will be resetting their forecasts in order to predict the timing of the next possible rate reduction.

Cash rate forecasts: Westpac, NAB, CommBank & ANZ

These figures offer an overview of the Big Four banks' cash rate outlook as at 19 February, 2025.

Mar 25
 Jun 25
 Sep 25
 Dec 25
 Mar 26
 Jun 26
 Sep 26
 Dec 26
Westpac
 4.10%
 3.85%
 3.60%
 3.35%
 3.35%
 3.35%
 3.35%
 3.35%
NAB
 4.10%
 3.85%
 3.60%
 3.35%
 3.10%
 3.10%
 3.10%
 3.10%
CommBank
 4.10%
 3.85%
 3.60%
 3.35%
 3.35%
 3.35%
 3.35%
 3.35%
ANZ 4.10% 4.10% 3.85% 3.85% – – – –

ASX cash rate forecasts: RBA Rate Indicator

This tracks market expectations of a change in the cash rate, shown as a percentage probability. Results are based on market determined prices in the ASX 30 Day Interbank Cash Rate Futures

Trading Day No Change Decrease to 3.85%
05 February 61% 39%
06 February 61% 39%
07 February 67% 33%
10 February 69% 31%
11 February 73% 27%
12 February 79% 21%
13 February 79% 21%
14 February 79% 21%
17 February 79% 21%
18 February 79% 21%

How can homeowners save on loan repayments?

If lenders reduce their variable home loan rates by 25 basis points, in line with the latest cash rate decision, Aussie homeowners could see meaningful savings on their monthly repayments.

According to Mozo’s analysis, the average Aussie borrower with a $665,978 loan could save approximately $104 per month, or $1,253 per year, if their bank delivers the full rate cut.

Borrowers in New South Wales, Queensland and the Australian Capital Territory are likely to see the biggest difference in terms of dollar value on their mortgage repayments. See below for a state-by-state comparison and breakdown of potential borrower savings:

RBA cuts to 4.10%
State
 Loan Amount
 Monthly Repayments ($)
 Repayments After Cut ($)
 Monthly Repayment Difference ($)
 Yearly Repayment Difference ($)
Australia
 $665,978
 $4,585
 $4,480
 -$104
 -$1,253
NSW
 $810,744
 $5,581
 $5,454
 -$127
 -$1,525
VIC
 $631,514
 $4,347
 $4,248
 -$99
 -$1,188
QLD
 $635,416
 $4,374
 $4,275
 -$100
 -$1,195
SA
 $580,207
 $3,994
 $3,903
 -$91
 -$1,092
WA
 $598,771
 $4,122
 $4,028
 -$94
 -$1,126
TAS
 $473,180
 $3,257
 $3,183
 -$74
 -$890
NT
 $465,348
 $3,203
 $3,130
 -$73
 -$875
ACT
 $649,762
 $4,473
 $4,371
 -$102
 -$1,222
Source: mozo.com.au Based on 25 year terms, Owner Occupier Principal & Interest, LVR <80%. average variable rate of 6.71% as of 12th feb 2025, and 6.71% minus 0.25% used for cash rate at 4.10% figure. data accurate as at 12th february 2025. average home loan size based on abs lending indicators data average loan sizes for owner occupier dwellings by state, december 2024 – this information was released 12th february 2025.

If you’re struggling to service your loan, you might consider calling your lender to negotiate your rate or do your own research to investigate whether refinancing may be a viable option.

The best path for you will depend on your individual financial circumstances.

Looking to buy your first home? Consider these three ways to break into the property market.

Compare a range of home loans, listed on the Mozo database, below.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 9 March 2025 Important disclosures and comparison rate warning*
What are your home loan needs?
Loan purpose
Buying or Refinancing
  • Promoted

    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.65 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • RATE CUT NOW LIVE!
    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees
  • Promoted

    Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.79 % p.a.
    Variable
    Comparison rate
    5.83 % p.a.
    Initial monthly repayment
    $2,931
    Go to site
    • RATE CUT NOW LIVE!
    • No monthly or ongoing fees
    • Option to add an offset for 0.10%
  • Promoted

    OMG Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.77 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No ongoing annual fees
    • Pre-approval valid for 3 months

  • Basic Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Redraw available
    Interest rate
    5.55 % p.a.
    Fixed 2 years
    Comparison rate
    5.85 % p.a.
    Initial monthly repayment
    $2,855
    Go to site
    • No ongoing fees
    • Free redraw from your loan using Macquarie Online.
    • No application or account management fees

  • Offset Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.55 % p.a.
    Fixed 2 years
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $2,855
    Go to site
    • Open up to 10 offset accounts
    • No fee to redraw or split into multiple loan accounts
    • Variable and fixed rates available

  • Fixed Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    • Redraw available
    • Cashback
    Interest rate
    5.69 % p.a.
    Fixed 2 years
    Comparison rate
    6.00 % p.a.
    Initial monthly repayment
    $2,899
    Go to site
    • Get up to $4,000 cashback (T&Cs apply)
    • Up to 12 months repayments in advance without penalties
    • Split loan available

  • Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.65 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • RATE CUT NOW LIVE!
    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees

  • Simple Home Loan Variable

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.74 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No application, ongoing or monthly fees
    • Make additional repayments at any time
    • Access your money via internet banking at any time

  • OMG Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.77 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No ongoing annual fees
    • Pre-approval valid for 3 months

  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    Interest rate
    5.74 % p.a.
    Fixed 2 years
    Comparison rate
    5.96 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • No ongoing annual fees
    • Make up to $25,000 extra repayments during a fixed period, fee free (T&Cs apply)
    • Lock in for up to 5 years.
Showing 8 results from 417 home loans. Use the filters to see more

* 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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