Australian mortgage holders may soon experience some relief as experts increasingly predict a potential interest rate cut by the Reserve Bank of Australia (RBA) during its upcoming meeting next week. A recent Finder survey indicated that 73% of economists forecast a cut at the RBA’s first meeting of the year, which will conclude on Tuesday afternoon AEDT. A 25 basis point decrease would reduce the cash rate to 4.1%.
Finder’s Graham Cooke noted that such a reduction could provide much-needed assistance to borrowers who have faced financial difficulties for several years. While he observed that headline inflation is within targets, some experts caution against a rate cut. Adjunct Professor Noel Whittaker warned about ongoing inflation in the construction sector and a robust job market, which may deter the RBA from acting too soon.
Despite divided opinions, AMP’s Shane Oliver argued that underlying inflation is declining quicker than anticipated and economic activity has softened.
Should the predicted cut occur, homeowners with an average mortgage of $641,416 could save over $100 monthly, highlighting the ongoing financial pressure faced by many. As over a third of homeowners reported struggles with mortgage payments as of January, the implications of any adjustment in rates could be significant for those affected.