RBA Cuts Cash Rate to 3.60% — A Window of Opportunity

Today, 12th August 2025 the Reserve Bank of Australia announced a 25 basis point cut, taking the official cash rate to 3.60%.

The decision was unanimous, reflecting the RBA’s view that inflation is easing back towards the target range of 2–3%, while the labour market has softened slightly. Unemployment has ticked up to 4.3% in June, and wages growth has eased from its peak. Globally, uncertainty remains high, with trade tensions and slower global growth still on the radar.

Why Rates Are Falling Now

The RBA cuts rates when it wants to stimulate the economy — usually because inflation is slowing or unemployment is rising.

  • Inflation: Trimmed mean inflation has dropped to 2.7%, headline inflation to 2.1%, broadly in line with earlier forecasts.

  • Labour Market: Conditions are easing, but still relatively tight in some industries.

  • Global Outlook: While extreme scenarios appear less likely, ongoing trade and policy uncertainty is expected to weigh on activity worldwide.

This cut is part of a gradual easing path that has already reduced rates by 0.75% since the start of the year.

Better Times for Some, Caution for Others

For many borrowers, today’s cut will bring genuine relief — lower repayments, a chance to breathe, and the ability to redirect funds towards savings or debt reduction.

But the RBA has also made it clear: this is a balancing act. Rate cuts can be a sign of economic headwinds ahead. While some households will benefit immediately, others may find that a softer economy brings different challenges — such as reduced job security or slower business growth.

Fixed Rates Are Already Dropping

Even before today’s announcement, lenders had been moving:

  • Bank of Queensland now offers a 2-year fixed rate at 4.89%.

  • ME Bank offers 4.99% for 2 years.

  • Macquarie was the first to reduce to 4.99% for 2 years

  • Terms and Conditions apply and credit criteria applies

These shifts suggest that competition is heating up — but as always, these offers can change quickly.

Don’t Sit Still — Tidy Up Your Loan Now

Falling rates present a rare opportunity to get ahead. Here’s how:

  • Review Your Current Rate: Your lender may not pass on the full cut — or any of it.

  • Refinance or Restructure: Move to a sharper deal or restructure your loan to reduce risk.

  • Consolidate Debts: With rates lower, consolidating personal loans, credit cards, or tax debts can free up cash flow.

  • Plan Ahead: If you’re on an interest-only term or your fixed rate is due to expire, take control before rates or markets shift again.

If You’re Considering Buying – SMSF, First Home, Investment, or Commercial

Rate cuts can be great news for borrowers — but they often come with a catch. History shows that when rates fall, property prices often rise, meaning the same property could cost you more just a few months later.

If you’ve been considering:

  • Buying through your SMSF

  • Purchasing your first home

  • Securing an investment property

  • Acquiring commercial property

…then this is your window to act before competition pushes prices higher. The combination of lower borrowing costs and increased buyer demand can quickly change market dynamics. Getting your foot in the door now could mean paying less and securing stronger long-term gains.

Final Word:
Today’s decision is a welcome break for many households, but it’s also a reminder that the economic landscape can change quickly.

Talk to us today about reviewing your finance options, getting pre-approval, and moving before the market gets ahead of you.

Book your home loan review today → https://hubs.la/Q03ngcJY0

Or if you’d prefer to start with a bit more info, you can also Download our Free  Refinance Guide to see what’s involved and what to watch out for.

We’re here to help when you’re ready.

WhiteStar Mortgage Brokers