Home loan watch: when will interest rates come down again? Industry forecasts explained

By Peter Terlato · · 4 min read
Fact Checked
Advertiser disclosure

Key Points

  • The cash rate remains at 4.10% after the April 2025 monetary policy meeting.
  • All Big Four banks accurately predicted that the RBA would hold rates steady.
  • The Board noted that monetary policy is well placed to respond to international developments.
  • The timing of further rate cuts remains speculative but many experts suggest a May cut.
Collage of a woman walking down a descending graph line.

The Reserve Bank of Australia (RBA) maintains that its number one enemy is inflation. If inflation stays high, so will home loan interest rates. For households experiencing mortgage stress, a cut to the cash rate may see their variable rates reduced - which, for some, can't come soon enough.

On Tuesday 1 April 2025, Australia's central bank kept the official cash rate at 4.10%. View

When will the RBA cut rates again?

Both sticky inflation and, subsequently, the RBA's decisions defied expectations in 2024, leading many economists to adjust their cash rate cut calls further and further into the future.

However, now that the RBA has cut the cash rate in 2025, banks and market commentators have reset their forecasts in order to predict the timing of the next possible rate reduction.

Cash rate forecasts: Westpac, NAB, CommBank & ANZ

These figures offer an overview of the Big Four banks' cash rate outlook as at 1 April, 2025.

Mar 25
 Jun 25
 Sep 25
 Dec 25
 Mar 26
 Jun 26
 Sep 26
 Dec 26
Westpac
 4.10%
 3.85%
 3.60%
 3.35%
 3.35%
 3.35%
 3.35%
 3.35%
NAB
 4.10%
 3.85%
 3.60%
 3.35%
 3.10%
 3.10%
 3.10%
 3.10%
CommBank
 4.10%
 3.85%
 3.60%
 3.35%
 3.35%
 3.35%
 3.35%
 3.35%
ANZ 4.10% 4.10% 3.85% 3.85% – – – –

ASX cash rate forecasts: RBA Rate Indicator

This tracks market expectations of a change in the cash rate, shown as a percentage probability. Results are based on market determined prices in the ASX 30 Day Interbank Cash Rate Futures

Trading Day No Change Decrease to 3.85%
18 March 90% 10%
19 March 92% 8%
20 March 90% 10%
21 March 90% 10%
24 March 92% 8%
25 March 92% 8%
26 March 92% 8%
27 March 92% 8%
28 March 92% 8%
31 March 90% 10%

How can homeowners save on loan repayments?

If lenders reduced their variable home loan rates by 25 basis points, in line with the February cash rate decision, Aussie homeowners could see meaningful savings on their monthly repayments.

According to Mozo’s analysis, the average Aussie borrower with a $665,978 loan could save approximately $104 per month, or $1,253 per year, if their bank delivered the full rate cut.

Borrowers in New South Wales, Queensland and the Australian Capital Territory are likely to see the biggest difference in terms of dollar value on their mortgage repayments. See below for a state-by-state comparison and breakdown of potential borrower savings:

RBA cuts to 4.10%
State
 Loan Amount
 Monthly Repayments ($)
 Repayments After Cut ($)
 Monthly Repayment Difference ($)
 Yearly Repayment Difference ($)
Australia
 $665,978
 $4,585
 $4,480
 -$104
 -$1,253
NSW
 $810,744
 $5,581
 $5,454
 -$127
 -$1,525
VIC
 $631,514
 $4,347
 $4,248
 -$99
 -$1,188
QLD
 $635,416
 $4,374
 $4,275
 -$100
 -$1,195
SA
 $580,207
 $3,994
 $3,903
 -$91
 -$1,092
WA
 $598,771
 $4,122
 $4,028
 -$94
 -$1,126
TAS
 $473,180
 $3,257
 $3,183
 -$74
 -$890
NT
 $465,348
 $3,203
 $3,130
 -$73
 -$875
ACT
 $649,762
 $4,473
 $4,371
 -$102
 -$1,222
Source: mozo.com.au Based on 25 year terms, Owner Occupier Principal & Interest, LVR <80%. average variable rate of 6.71% as of 12th feb 2025, and 6.71% minus 0.25% used for cash rate at 4.10% figure. data accurate as at 12th february 2025. average home loan size based on abs lending indicators data average loan sizes for owner occupier dwellings by state, december 2024 – this information was released 12th february 2025.

If you’re struggling to service your loan, you might consider calling your lender to negotiate your rate or do your own research to investigate whether refinancing may be a viable option.

The best path for you will depend on your individual financial circumstances.

Looking to buy your first home? Consider these three ways to break into the property market.

Compare a range of home loans, listed on the Mozo database, below.

Last updated 10 April 2025 Important disclosures and comparison rate warning*
What are your home loan needs?
Loan purpose
Buying or Refinancing
  • Promoted

    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.65 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • Built by CommBank
    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees
  • Promoted

    Basic Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Redraw available
    Interest rate
    5.39 % p.a.
    Fixed 2 years
    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,805
    Go to site
    • No ongoing fees
    • Free redraw from your loan using Macquarie Online.
    • No application or account management fees
  • Promoted

    Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.79 % p.a.
    Variable
    Comparison rate
    5.83 % p.a.
    Initial monthly repayment
    $2,931
    Go to site
    • No monthly or ongoing fees
    • Option to add an offset for 0.10% p.a.
  • Promoted

    Neat Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.84 % p.a.
    Variable
    Comparison rate
    5.86 % p.a.
    Initial monthly repayment
    $2,947
    Go to site
    • Free extra repayments
    • Easy redraw facility
    • No annual fee to pay
  • Promoted

    Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.78 % p.a.
    Variable
    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,927
    Go to site
    • $0 application fee to pay
    • Unlimited additional repayments
    • Apply in as little as 15 minutes

  • Basic Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Redraw available
    Interest rate
    5.39 % p.a.
    Fixed 2 years
    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,805
    Go to site
    • No ongoing fees
    • Free redraw from your loan using Macquarie Online.
    • No application or account management fees

  • 2-Year Discounted - Simple Home Loan Variable

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.49 % p.a.
    Variable for 24 months and then 5.74% p.a.
    Comparison rate
    5.69 % p.a.
    Initial monthly repayment
    $2,836
    Go to site

  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    Interest rate
    5.49 % p.a.
    Fixed 2 years
    Comparison rate
    5.91 % p.a.
    Initial monthly repayment
    $2,836
    Go to site
    • No ongoing annual fees
    • Make up to $25,000 extra repayments during a fixed period, fee free (T&Cs apply)
    • Lock in for up to 5 years.

  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • Interest only
    • 20% min deposit
    Interest rate
    5.49 % p.a.
    Fixed 2 years
    Comparison rate
    5.96 % p.a.
    Initial monthly repayment
    $2,836
    Go to site
    • Free extra repayments of up to $25,000 during the fixed rate period.
    • Split loan available
    • Weekly, fortnightly, or monthly repayment options

  • Discounted Complete Package Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.64 % p.a.
    Variable for 24 months and then 5.89% p.a.
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $2,883
    Go to site
    • 100% offset account
    • Make additional repayments at any time
    • Get a fee-free credit card (T&Cs apply)
Showing 9 results from 415 home loans. Use the filters to see more

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Compare home loans