Australia’s big four banks are still predicting that rates have peaked, and economists currently predict that the RBA might make its first cut to the cash rate between February and May of 2025.

What is happening with the cash rate?

In the midst of the COVID pandemic, Australia’s central bank set the cash rate at a historic low level of 0.10%, but subsequent years saw a number of hikes, in an attempt to catch up with soaring inflation and steady the economy. The cash rate has been on pause at its current level of 4.35% throughout all of 2024, and the central bank once again held it steady at its most recent meeting, announcing the call on Tuesday November 5. The RBA’s next cash rate call is on Tuesday December 10.

Will Australians see rate cuts in 2024?

Economists at the nation’s big four banks are still predicting that we’ve seen the peak of the most recent round of rate rises, but none of the big four anticipate rate cuts before the beginning of 2025 at the earliest. In the middle of 2024 Adam Boynton, head of Australian economics at ANZ, said that for well over a year, the bank anticipated that the first round of RBA cash rate cuts would occur in November 2024. In subsequent months, though, economists at the bank update their predictions, first saying that anticipated cuts might happen in February of 2025, and more recently, pushing their prediction back to May.

Will interest rates rise again in 2024?

At this stage, it appears unlikely that rates will rise again in 2024, but this does not mean that cuts are imminent either, and the RBA may continue to hold for the next several months. Recent, better-than-expected jobs data shows that employment rose by 3.1% in Australia in this past year, with the employment participation rate rising to a record high of 67.2%. Betashares chief economist David Bassanese said that these healthy employment numbers will “comfort” the RBA. The economist told the Australian Financial Review that the jobs figures mean the RBA can “continue to wait for a decent decline in inflation before cutting rates, rather than being forced into cutting rates due to weakness in the economy.”

What are the big for banks’ cash rate predictions?

Here’s what the nation’s big four banks have to say about the RBA’s predicted movements throughout the rest of 2024:

• ANZ predicts that the current level of 4.35% will be the cash rate’s peak, with the first cuts to start around May of 2025.
• CommBank predicts that the current level of 4.35% will be the cash rate’s peak, and that the first cut is likely to occur in February of 2025.
• NAB economists predict that the current level of 4.35% is the cash rate’s peak, with the first cuts to occur around May of 2025.
• Westpac predicts that the current level of 4.35% will be the peak, and that we might expect the first rate cuts to occur around May 2025.

Where the RBA board formerly met on the first Tuesday of each month, excluding January, it now meets eight times a year, for two days at a time. This means that the RBA’s next cash rate announcement is due on Tuesday December 10 at 2.30pm. It remains to be seen whether the board will make any changes to the cash rate, or continue the pause.

How can I compare home loans?

If you’re looking for a low fixed or variable rate for a new home loan or a refinance, you can compare home loans with Canstar to see if you can find a lender offering a deal that meets your needs and circumstances. If you’re considering refinancing from a variable rate to a fixed one, it may also be worth considering the pros and cons of fixing your home loan, and considering the current interest rates on home loans to see how fixed and variable rate loans stack up. You might also want to consider some of the home loan refinancing deals that might be available.