Banks may quickly lower mortgage rates to attract borrowers if the Reserve Bank of Australia (RBA) implements an expected interest rate cut today. The RBA’s first cash rate meeting of the year, scheduled for 2:30 PM AEDT, is set to provide relief to homeowners facing high borrowing costs. Westpac has already adjusted its variable mortgage rate, maintaining its lowest offer at 6.44% after removing a previous increase.
Other banks have also begun reducing rates in anticipation of the RBA’s decision. Financial comparison site Canstar suggests a resurgence in competitive mortgage offerings if a rate cut is confirmed, with big banks likely passing on the cut to variable rate borrowers.
Despite widespread expectations for a rate reduction, not all experts are convinced. Some, like Queensland University of Technology’s Noel Whittaker, argue that the RBA might prefer to wait another month due to ongoing inflationary pressures, particularly in the building industry and a robust job market. Sean Langcake from Oxford Economics shares similar sentiments, indicating that a decision could be tightly contested.
Among 37 experts surveyed, 27 expect the RBA to lower the cash rate today, signalling a potential turning point in the mortgage landscape as banks prepare to respond to changing interest rates.