Reserve Bank lowers cash rate by 0.25% to 4.10% in first cut since 2020

ABC NEWS (Australia)

The Reserve Bank of Australia cut interest rates on Tuesday afternoon for the first time since November 2020, after keeping rates on hold at 4.35 per cent for more than a year.

Transcript

00:00A crowd-pleasing decision, and the smile showed the Governor knew it.

00:14The rate cut means homeowners with a $500,000 mortgage should see their repayments fall

00:19by $77 a month, and Australians with a million dollar mortgage will see their repayments

00:24drop by $154.

00:28It's welcome relief for this struggling dad and his family.

00:31It's going to save us about $1,000 a year, just this first interest rate cut, so that's

00:37not insignificant.

00:38The big four banks moved within minutes, announcing they'll pass on the rate cut in full.

00:43But it'll still take about a couple of weeks before you notice the rates on your home loan

00:46come down.

00:47As a borrower, you have the choice of reducing your minimum monthly repayment, or keeping

00:52them as they are in order to pay off the loan quicker.

00:54Either way, it'll cost you less.

00:57That's a huge change for us, that's going to make a big difference.

00:59Pretty good for a fast home like buyers.

01:02But further cuts aren't guaranteed, with the RBA Governor saying the inflation fight isn't

01:07over.

01:08What are the chances the Reserve Bank is won and done when it comes to interest rate cuts,

01:12and today's cut could be the only one that we see?

01:14I couldn't say.

01:17What I would say is that the market is expecting quite a few more interest rate cuts.

01:23Whether or not that eventuates is going to depend very much on the data.

01:27Economists say there could be some cuts ahead.

01:29We think that we'll get another two, but it's not like we're going to see back-to-back rate

01:34declines.

01:35I'd be reasonably of the view that we won't get another cut ahead of the election.

01:42But households are hoping they won't have to wait too long.

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