Will the RBA cut interest rates in November?

The Reserve Bank of Australia looks poised to cut official interest rates by 0.15% next week, which would leave the cash rate at a record low 0.1%.

In recent speeches the RBA has signalled a willingness to take the cash rate below its current setting while keeping it above zero. Speculation reached a fever pitch in the lead up to last month’s meeting but ultimately the Board decided against making a move.

For Mozo’s banking expert Peter Marshall, November is almost certainly the month the RBA will opt for further easing.

“It’s obvious that things are going to take a very long time to recover, and while the bank stood by to let the government have some clear air for the budget in October, it’s now ready to step in and support the budget measures,” he said.

A number of economists have also backed a November cut. CBA chief economist Stephen Halmarick believes the Board will push further into the “conventional unconventional monetary policy space” next week. 

“This easing is expected to involve a cut in the three key interest rates – the cash rate target, the three-year bond yield target and the term funding facility target from 0.25% to 0.1%,” he said.

“Critically, this easing of monetary policy is expected to be implemented at the same time as the RBA looks set to revise upwards their economic forecasts given the run of better economic data.”

Westpac chief economist Bill Evans also anticipates a change in the bond purchasing program, though he does not expect the Board to set a specific quantity target.

“It is already setting a price target for the three year rate. Fixing both price and quantity targets may lead to unexpected difficulties down the track,” he said. 

While the RBA's bias against negative interest rates has softened somewhat over the last six months, the possibility the cash rate will dip below zero remains unlikely.

“There's no evidence that they have yet given such a move serious consideration, and they are likely to continue to rely on other methods of supporting the economy for some time yet,” said Marshall.

Will banks cut home loan rates?

While it’s difficult to predict how banks and lenders will respond to another rate cut, there’s a good chance we’ll see fixed rates drop to new lows as banks try to lock in quality borrowers.

The RBA’s term funding facility has allowed banks to make substantial cuts across their fixed rate sheets. Since it launched in March, the average three-year option has plummeted from 3.16% p.a. to 2.55% p.a.

“The RBA may also consider placing downward pressure on longer term rates, for example through the purchase of bonds and securities. This could see longer term fixed mortgage rates pushed down toward the level that shorter term rates currently sit at,” said Marshall.


For variable rate customers, the picture is less clear. When the Board last made the decision to reduce the cash rate, most lenders responded by cutting fixed mortgage rates to the exclusion of variable ones. According to Marshall, we could see the same play out in November.

“I’ll think they'll try to pass on some of it, but their profits are under pressure, as evidenced by ANZ’s recent profit announcement. Banks will be looking to manage their interest margins in any way they can,” he said.

For an idea of where mortgage rates currently sit, visit our home loan comparison page. And if you’re after more property and lending insights, be sure to visit our home loan statistics page.

Home loan comparisons on Mozo - last updated 19 March 2024

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