With the cash rate remaining steady at 4.35% for 12 consecutive months, the question on many homeowners' minds is: when will it start to fall?
Three of the big four banks (CBA, Westpac and ANZ) optimistically expect the first rate to occur in February 2025, while NAB pegs it at May 2025.
However, it all depends on when inflation returns to the targeted range of 2-3% set by the Reserve Bank of Australia (RBA).
The RBA expects headline inflation to return to the target range in the first half of next year, but underlying inflation (which is the indicator they monitor more closely) is forecast to take longer to stabilise.
But if economic conditions continue on the current trajectory, the RBA predicts that inflation could be below 4% by December 2025.
In the meantime, what can you do to lower the interest you pay on a home loan?
● If you have spare cash, you can make extra payments on your home loan account. Alternatively, you can put extra cash into an offset account if your loan is linked to one. Both these actions will help reduce the total interest you pay on your loan.
● Shop around for a home loan offering a better rate. Refinancing your home loan can potentially save thousands of dollars in interest.
If you would like to refinance your home loan, click here to talk to a mortgage broker.