RBA Holds Interest Rate at 4.35%
The Reserve Bank of Australia maintains cash rate at 4.35% in its final meeting of 2024, with markets pricing in potential rate cuts for early 2025.
4.35%
Cash Rate
13
Months on Hold
3.5%
Inflation Rate
Q1 2025
Expected Cut
December 2024 Decision
The Reserve Bank of Australia (RBA) announced today that it will maintain the official cash rate at 4.35%, marking the 13th consecutive month at this level. The decision was widely anticipated by economists and financial markets.
RBA Governor Michele Bullock stated that while inflation has been moderating, the Board remains cautious about declaring victory over price pressures. The current inflation rate of 3.5% remains above the RBA's target band of 2-3%.
"The Board remains focused on returning inflation to target within a reasonable timeframe."
— RBA Governor Michele Bullock
Impact on Mortgage Holders
For the average Australian homeowner with a $600,000 mortgage, the current rate environment means monthly repayments of approximately $3,860 on a 30-year loan at 6.29% (average variable rate).
| Loan Amount | Monthly Payment | Interest (30yr) |
|---|---|---|
| $400,000 | $2,573 | $526,000 |
| $600,000 | $3,860 | $789,000 |
| $800,000 | $5,147 | $1,053,000 |
| $1,000,000 | $6,433 | $1,316,000 |
Based on 6.29% variable rate, 30-year term, principal & interest
When Will Rates Fall?
Financial markets are currently pricing in the first rate cut for February or April 2025. Major bank economists have varying predictions:
- Commonwealth Bank: First cut February 2025
- Westpac: First cut May 2025
- NAB: First cut May 2025
- ANZ: First cut May 2025
A 0.25% rate cut would save the average mortgage holder approximately $92 per month on a $600,000 loan.
Potential Savings from Rate Cuts
If rates fall by 1% over 2025 (four 0.25% cuts), a $600,000 mortgage holder could save approximately $368 per month or $4,416 per year.
What This Means for Property Buyers
The stable rate environment provides certainty for buyers considering entering the market. Key considerations:
- Fixed rates may offer value if you believe rates will stay higher for longer
- Variable rates could benefit from potential cuts in 2025
- Offset accounts remain valuable for reducing interest costs
- Extra repayments now can significantly reduce long-term interest
RBA Rate History
| Date | Cash Rate | Change |
|---|---|---|
| Dec 2024 | 4.35% | No change |
| Nov 2023 | 4.35% | +0.25% |
| Jun 2023 | 4.10% | +0.25% |
| May 2022 | 0.35% | +0.25% |
| Mar 2020 | 0.25% | -0.25% |
Next Steps for Homeowners
- Review your loan: Check if you're on a competitive rate
- Compare lenders: Refinancing could save thousands
- Make extra repayments: Every extra dollar reduces interest
- Use offset accounts: Park savings to reduce interest charges
- Budget for potential changes: Prepare for rate movements either way
Related Calculators
Calculate your potential savings: