Aussie borrowers ‘counting chickens’ before Feb interest rate decision

By Jack Dona · · 2 min read
Fact Checked
A serious couple sit in their kitchen examining their finances on a laptop

The majority of Australian mortgage holders are waiting with bated breath for the first cash rate decision of 2025, with hopes hinged on a February cut.

Mozo’s new survey of 1,020 mortgage holders asked to what degree they are relying on a cash rate cut by the Reserve Bank of Australia (RBA) to keep their mortgage repayments on track.

As it turns out, a whopping 71% say they are relying on a cut next month to keep their home loans ticking over.

Ten percent said they are ‘completely reliant’ on a rate cut, while 13% said they are ‘heavily reliant’ and almost half of those surveyed (48%) report being only ‘somewhat reliant’.

On the other end of the spectrum, just under one-third of Aussie home loan borrowers (29%) said they are not relying on a cut at all.

How many homeowners are relying on a rate cut in February?

A table showing survey responses from Australian home loan borrowers when asked if they were relying on the RBA to cut rates to keep their mortgage repayments on track.

"...homeowners are essentially counting their chickens before they hatch..."

According to Mozo Money Expert, Rachel Wastell, borrowers betting on a February rate cut could be getting ahead of themselves.

“This is concerning because homeowners are essentially counting their chickens before they hatch, when there’s no guarantee the RBA will deliver a rate cut next month,” she said.

Australia’s Big Four banks are currently split on their rate cut forecasts , between February (ANZ and CommBank) and May (Westpac and NAB).

But waiting for a rate cut that may not come isn’t the only option for struggling borrowers, Wastell says.

“Refinancing your mortgage now could give you a rate cut today, with no RBA decision required. Or, if you can’t afford to refinance, comparing the rates on offer from other lenders could give you the ammunition you need to negotiate a lower rate for your current home loan.”

How much Aussies could save by switching home loans

The Mozo database currently shows over a dozen lenders offering home loan interest rates starting with a ‘5’.

These include well-known lenders like HSBC, as well as digital and regional lenders like Unloan (backed by CommBank), Newcastle Permanent, and The Mutual Bank.

Looking at the 422 home loans in the Mozo database, the average variable rate sits at 6.73% p.a., showing there are significant savings to be made by those who do their research.

“It may not seem like a big difference, but when it comes to home loans, the smallest difference in interest rates can equate to hundreds of dollars in monthly savings,” says Wastell.

Less than a 1% p.a. difference between the two rates (for homeowners making principal and interest repayments over a 25 year loan term with an 80% LVR), equates to savings of $230 a month for a $500,000 mortgage, or up to $460 a month on a $1million home loan.

A data table showcasing the difference between a 6.73% p.a. interest rate and a 5.99% p.a. interest rate on a borrower's repayments.

Until 18 February, we won’t know what the RBA plans to do with the cash rate. But by being proactive, you could negotiate with your current lender or refinance and get a leg up on bringing your interest rate down.