Update note: Policy settings, rates and lender offers can change. Treat this article as general information and confirm current details before making a finance decision.
The Reserve Bank of Australia (RBA) has held the cash rate at 4.35% since late 2025, bringing an end to a period of significant volatility that saw rates move from historic lows to their highest level in over two decades.
Where Are We Now?
After 13 consecutive rate rises between May 2022 and November 2023, the RBA began cutting rates in early 2025. The current stance reflects a balancing act — keeping inflation near the target band (2-3%) while supporting economic growth.
The RBA has signalled that further rate moves are data-dependent, with housing affordability and household spending being key factors to watch.
What This Means for Home Loan Borrowers
Variable Rate Borrowers
If you're on a variable rate, your repayments may have adjusted as lenders respond to RBA decisions. Most major banks have passed through recent cuts, but the full effect can take time.
Fixed Rate Borrowers
Fixed-rate deals are becoming more available again as lenders gain confidence in rate stability. If you've been waiting for a better fixed deal, now may be worth exploring — though rates are still higher than the historic lows of 2021-2022.
New Borrowers
For first home buyers entering the market now, interest rates are stabilising. This makes it easier to forecast your repayments and plan your budget with more certainty than in recent years.
Should You Lock In a Fixed Rate?
The decision to fix depends on your risk tolerance and financial situation:
- Fix if you want payment certainty, are close to your budget limit, or believe rates may rise again.
- Stay variable if you have offset accounts, redraw facilities, or think rates may fall further.
- Consider splitting — fix part of your loan for certainty and keep the rest variable for flexibility.
The Bottom Line
Interest rate uncertainty may ease or return as economic conditions change. Smart borrowers focus on what they can control: choosing suitable loan features, comparing lenders regularly, and working with a broker who can explain the trade-offs.
Want to talk it through? Our team can review your current loan and explain the options that may suit your circumstances.