Mortgage holders across Australia breathed a collective sigh of relief this afternoon as the Reserve Bank of Australia finally announced a long-awaited interest rate cut, taking the official cash rate from 4.35% to 4.1%. According to the treasurer, Jim Chalmers, the four major banks have been quick to confirm that they will pass on the “full benefits” of the decision.
Such a tiny cut might not feel like much to those saddled with large debt. Remember, the cash rate rose from just 0.1% in April 2022, adding thousands of dollars a month to mortgage repayments. But it’s important to remember that, only in November, the RBA was still “not ruling anything in or out”. In other words, a rate rise was still being debated. This phrase was finally removed at the December meeting, giving confidence that a rate rise was finally off the table, but certainly not guaranteeing a rate cut any time soon.
