Interest rates fall with more cuts expected by the end of 2025
According to Knight Frank’s latest Australian Capital View Report, the cash rate is expected to keep falling throughout 2025. With both headline and core inflation back within the target range, the Reserve Bank of Australia (RBA) is now shifting to a less restrictive approach to support economic growth.
In May, the RBA delivered its second rate cut of the year, reducing the interest rate by a further 0.25% and bringing the total easing this cycle to 0.5%. Markets are already pricing in another two to three cuts before the end of the year, with a terminal rate close to 3.0% expected by 2026.
While this is positive news for borrowers, there are still risks to watch. Rising trade tensions could impact the global economy and may push the RBA to move more aggressively. For now, the outlook is improving, and the shift in policy is starting to ease borrowing conditions.
About the author – Alex Veljancevski is a Sydney Mortgage Broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking to refinance to a better deal on their home loan.