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At its sixth monetary policy meeting of the year, the Reserve Bank has held the cash rate steady at 3.60 per cent.
The Reserve Bank of Australia (RBA) has elected to hold the cash rate steady at 3.60 per cent.
The RBA’s decision to hold the cash rate was a largely unsurprising result, with each of the major banks and a slew of economists penning November as the meeting with the potential of a cut.
The recent consumer price index (CPI) data from the Australian Bureau of Statistics played heavily into this decision, with inflation rising to 3 per cent in August from 2.8 per cent in July. This places inflation at the top end of the RBA’s coveted 2–3 per cent target band.
According to Canstar, the possibility of a September cut was “always an outside chance”. The “higher than expected” CPI data heightened the chances of a hold.
This year has seen a hold follow each cut. The last meeting in August was a 25-bps cut, making this meeting’s hold even more unsurprising.
This meant a hold was unsurprising, said Mortgage Choice CEO Anthony Waldron. He believes the upcoming September CPI data will influence the November decision heavily.
“The RBA has been clear that it is taking a longer-term view when making decisions about the cash rate,” said Waldron.
“Even without another rate cut this month, I’d encourage anyone looking to make a move into the market to start the process and get their ducks in a row. Navigating a competitive market can be daunting, especially if you’re doing it for the first time.”
The Finance Brokers Association of Australia (FBAA) is also unsurprised by the hold. Managing director Peter White urged borrowers to never budget on the assumption of a cut.
“Brokers should encourage customers to talk to their lender first and ask for a rate reduction, but if this is rejected, explain that there may be refinancing options,” said White.
“Some borrowers may assume the major banks are the only lenders, as they are unaware of the many second tier banks and non-bank lenders with excellent mortgage products, some of which are only offered through mortgage brokers.”
Adam Brown, NAB’s head of broker distribution, said the hold provides borrowers an opportunity to plan for the months ahead.
NAB said recently that it doesn’t believe there will be another rate cut until May 2026. While these holds won’t leave borrowers worse off, if the bank’s predictions are true, there won’t be any rate relief for many months.
Brown urged borrowers to take advantage of government incentives, such as the upcoming expansion of the Home Guarantee Scheme, which allows first home buyers access to 5 per cent deposits.
“With activity in this segment likely to pick up, it’s a timely opportunity for brokers to engage with first home buyers, guide them through the scheme, and provide support throughout the purchasing journey,” Brown said.
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