Rate cut brings welcome relief for mortgage holders

THE Reserve Bank of Australia’s decision to cut the official cash rate by 0.25 per cent—bringing it down to 3.85 per cent—is welcome news for homeowners. After a long stretch of rising interest rates, this move offers a much-needed reprieve for those juggling mortgage repayments alongside rising living costs.

For homeowners in areas like Geelong and the Surf Coast, the impact is tangible. With median house prices sitting around $1.175 million in Torquay and $750,000 in Geelong, many borrowers are carrying mortgages in the range of $600,000 to $950,000. A 0.25 per cent reduction in interest could save households between $120 and $200 per month, depending on their loan size and structure.

These savings can be used in a number of ways—some may choose to reduce their monthly repayments to ease cash flow, while others might maintain their current repayment levels to pay off their loan faster and reduce long-term interest costs.

For newer borrowers, especially those who stretched to enter the market during the recent property boom, this rate cut is more than just a financial adjustment—it’s a psychological shift. It signals that the tide may be turning, and that the pressure of rising rates could be easing.

It’s also a timely reminder to review your mortgage. With lenders competing for business, refinancing or negotiating a better deal could amplify the benefits of the rate cut. Even small changes in interest rates or loan terms can make a big difference over the life of a mortgage.

While the broader economic outlook remains cautious, this move by the RBA is a step toward supporting household stability. For mortgage holders, it’s a chance to regroup, reassess, and potentially get ahead.

WITH LEIGH DELEDIO AND PAUL NELSON

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