Taking advantage of rate cuts

We expected a rate cut this week, and the RBA delivered by slashing the official cash rate by 0.25 per cent to 3.85 per cent. Most lenders are expected to pass on the cut in full for variable home loan customers, as those that don’t risk losing out to more competitive banks. Variable rates under 6 per cent are now common, following what was the second rate cut of 2025.

Our mates at Loan Market shared an insightful article this week which included, among other things, five tips to take advantage of lower interest rates;

Compare and negotiate your rate

Get to know what rates are available and how yours compares. Use this information to talk to your lender. It never hurts to ask for a lower rate, and if they won’t offer a competitive deal, consider switching to another.

Keep your repayments the same
If your lender reduces your minimum repayments, consider asking to keep them at the higher amount. You could save a lot in interest and pay off your loan faster.

Make extra repayments
As we approach the new financial year, keep in mind you could contribute money you receive from a tax return or bonus toward your home loan. It could make a big difference over time.

Take advantage of your offset account or redraw
Putting extra savings in an offset account or into a home loan with a redraw facility can reduce the interest on your loan, but still be available if you need it. 

Switch to fortnightly repayments
Simply changing from monthly to fortnightly repayments can help you save big. That’s because you will make 26 fortnightly repayments rather than 12 monthly, meaning you are paying off more of the loan faster.

The Reserve Bank board next meets on 7-8 July, with most economists forecasting at least two more rate cuts by the end of the year. 

Have a fantastic weekend.

Matt Lancashire