Today, the Reserve Bank of Australia cut the official cash rate by 25 basis points to 4.1%. It was the first time the Board had cut the cash rate since November 2020.
Many thought a rate cut was a foregone conclusion after Westpac yesterday reduced its one-year fixed rate by 40bps to 5.69% and its two-year fixed rate by 30bps to 5.59%.
NAB had already made similar moves, trying to jump the gun on the competition
Today’s announcement won’t fill the pockets of property owners. For instance, a commercial borrower with a $900,000 principal and interest loan over 30 years and variable rate of 6.5% would see their monthly repayment decrease from $5689 to $5542 – $147.*
Although the savings may not be critical, we’re expecting to see an improvement in consumer confidence from the RBA move which will flow through into the economy.
Everyone will be interested to see the impacts of increased borrowing capacity on both commercial and residential property markets. Finance brokers are reporting healthy pre-approvals and follow-up enquiries from borrowers who weren’t able to meet serviceability buffers 12 months ago.
Borrowers will also be watching which lenders pass on the cut in full and fixed-rate offers.
For tenants, occupiers and investors, today’s cash rate cut holds opportunities across commercial and residential markets. Reach out to the team at Bromley Real Estate today to discuss how you’re positioned in the market.
*Indicative only and does not reflect every borrower’s individual situation. Contact your lender or broker to understand the impact of the RBA cut on your loan.