The Reserve Bank of Australia (RBA) has held the official cash rate steady at 3.60 % today. Markets have largely priced out the chance of any further cuts this calendar year, pointing to a potential move only in early to mid 2026. This is a somewhat cautious pause, but in the backdrop, there are shifting dynamics in the housing market: three cuts are already in the rear-view mirror, buyer demand is heating up in spring, and the Federal Government’s expanded First Home Guarantee Scheme (kicking in tomorrow) is expected to inject fresh momentum.
So, what should you make of this as a homeowner or aspiring buyer?
What the Pause Suggests for Future Rate Moves
The RBA’s decision to hold suggests two broad signals:
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The easing cycle may be nearing its limit.
With inflation risk still present and economic activity remaining resilient, the RBA is signalling it may need to tread carefully from here on. Some forecasts (for example, from NAB) suggest no further cuts until mid-2026. -
Future cuts are not off the table, but they’re no longer a slam dunk.
The RBA will continue to monitor inflation, wages growth, labour market data and global risks — any sharper-than-expected surprise in those could delay or even derail further easing.
In short: the tailwind from rate cuts is starting to fade.
For Homeowners: What You Can Do Now
You may not get many more rate cuts, so now is a window to make the most of the savings from the three cuts already applied this year.
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Lock in savings: If your mortgage is on a variable rate, evaluate whether your lender has passed on the cuts in full — if not, shopping around or refinancing might recover some of the difference.
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Pay down debt: Use the margin from lowered repayments to accelerate principal reductions or clear higher-cost debts.
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Review your buffer: With the prospect of tighter conditions ahead, make sure your cash buffer/trading liquidity is solid in case of rate volatility or defensive moves.
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Consider fixed/hedged options selectively: If you expect rates to firm, you might want to fix (or partially fix) a portion of your mortgage, depending on your appetite for certainty.
Remember: just because the cash rate is on hold doesn’t mean all lenders will respond — pass-throughs vary between banks.
For Buyers: Your Potential Opportunity
Three cuts mean one thing: increased borrowing power. And the expanded First Home Guarantee Scheme is about to widen access.
What’s changing with the First Home Guarantee
From 1 October 2025, the scheme is being overhauled:
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Unlimited places (no more quotas).
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No income caps for eligibility.
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Higher property price caps in many areas (to reflect rising home prices).
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The 5 % deposit entry option remains, with the Government acting as guarantor so you can avoid Lenders’ Mortgage Insurance (LMI).
These changes mean many buyers who were previously excluded (e.g. due to income or place caps) will now be eligible. It effectively lowers the barrier to entry.
Why the timing matters
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More borrowing leeway now: With interest costs a little lower than before the cuts, your serviceability improves.
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Act before demand surges: As buyer demand ramps up with spring + scheme expansions, competition (and prices) may follow.
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Lock in before conditions harden: If the RBA moves to stabilise or even reverse cuts, the lending environment will become less forgiving again.
But a caveat: this is a demand-side boost. Unless supply responds, there’s a risk the expansion could further push up prices in entry-level segments.
What You Should Do Next
Homeowners:
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Confirm whether your mortgage has fully absorbed the cuts. If not, talk to us.
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Use the gap to boost your equity or reduce other debt.
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Run “what if” scenarios: How would repayments look if rates rise again?
Buyers (especially first home buyers):
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Get yourself home-loan ready: credit, documentation, broker (talk to us), pre-approval.
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Explore how the expanded guarantee scheme applies in your area (check new price caps).
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Strike now where possible, before the anticipatory demand pushes up prices or interest margins.
FAQs
Will lenders change rates if the RBA holds the cash rate
Not always. Lenders set their own rates and may move them up or down for funding or competitive reasons. Consider comparing options if your rate has not fallen after recent cuts.
Does the First Home Buyer Guarantee remove LMI
The guarantee can allow eligible buyers to purchase with a smaller deposit while avoiding LMI. Eligibility and property price caps apply. Give us a call or email us to see if you qualify.
Have the three cuts increased my borrowing power
Lower rates can improve serviceability, though assessment rates and living expense benchmarks still apply. A borrowing estimate is not approval.
Is now a good time to fix my rate
The decision depends on your budget and risk tolerance. Fixed rates provide repayment certainty but may limit features. Seek personal advice before deciding.
