RBA cuts rates for second time in three months

The Reserve Bank has cut the official interest rate for the second time this year, delivering 0.25 percentage points of relief for mortgage holders.

The RBA cut the cash rate to 3.85 per cent in a move that was widely anticipated by markets and the major banks, the first time it has been below 4 per cent in two years.

The decision, if passed on in full by the country’s retail banks, will reduce the interest repayments on a $600,000 mortgage by about $100 a month.

After the bank started lifting rates in May 2022 until they hit 4.35 per cent in November 2023, repayments on that mortgage rose by almost $1500 a month. The two rate cuts this year – in February and May – have shaved $200 off those repayments.