RBA cuts interest rates – August 2025. What it means for buyers, sellers and owners
- Ash Gates
- Aug 12
- 3 min read
Cash rate lowered by 0.25% to 3.60% in August 2025 RBA decision
Published: 12 August 2025
The Reserve Bank of Australia (RBA) has announced another interest rate cut, reducing the official cash rate by 25 basis points to 3.60%. This is the third rate cut in 2025, taking the total reduction this year to 0.75%.
The RBA’s decision reflects continued moderation in inflation, which now sits at 2.7% on a trimmed mean basis and 2.1% headline, comfortably within the bank’s 2–3% target range.
While today’s move will be welcomed by borrowers, the RBA has signalled a cautious approach going forward, citing uncertainty in global markets and domestic economic conditions.
Why the RBA cut rates today
Inflation is under control – Inflation has fallen significantly since its 2022 peak and is now stable within target.
Labour market easing – Unemployment has risen slightly to 4.3%, easing wage pressure.
Economic uncertainty – Global trade tensions and domestic consumption risks remain.
Monetary policy support – The RBA believes further easing will support household spending and business activity.
RBA's Official Commentary:
“With underlying inflation continuing to decline back towards the midpoint of the 2–3 per cent range and labour market conditions easing slightly, as expected, the Board judged that a further easing of monetary policy was appropriate. This takes the decline in the cash rate since the beginning of the year to 75 basis points. The Board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply.”
What does this mean for home buyers?
Lower interest rates mean improved borrowing capacity and reduced monthly repayments for variable-rate loans.
Affordability boost – Your borrowing power may increase, allowing access to a wider range of properties.
More competition – Rate cuts can spur demand, so be ready to act quickly.
Lock in now? – Consider whether fixing part of your mortgage at today’s lower rates might offer certainty.
What does this mean for property sellers?
For sellers, the rate cut could bring:
Increased buyer interest – Lower borrowing costs tend to bring more buyers into the market.
Faster sales – Well-priced properties may see shorter listing times.
Market timing advantage – Selling during a period of renewed buyer confidence can mean stronger offers.
What does this mean for current homeowners?
If you already have a home loan:
Variable rate relief – Expect your repayments to drop once your lender passes on the cut.
Extra repayment opportunity – Keeping your repayments at pre-cut levels can save you thousands over the life of your loan.
Check your rate – Lenders may pass on different amounts or take time to adjust; now is the time to compare and potentially refinance.
When Will Lenders Pass on the Rate Cut?
Major lenders will announce in the coming days how and when they’ll pass on the RBA’s cut. Based on past trends, it can take between 10–14 days for changes to take effect, and you may need to contact your bank to adjust your minimum repayments.
Key drivers behind the cut:
Cash rate is now 3.60%.
Inflation is within target, giving the RBA room to ease policy.
Buyers could benefit from increased borrowing power.
Sellers may see stronger market activity.
Homeowners should review their loan to ensure they’re getting the best deal.
📩 Need help reviewing your loan or planning your next step?
Contact the Fync team today for a complimentary loan review.
How Fync can help you navigate interest rate changes:
At Fync, we help Australian homeowners, buyers, and investors navigate the changing interest rate environment. Whether you want to refinance, explore buying opportunities, or simply understand how today’s RBA decision affects your mortgage, our team is here to guide you.
Visit the Fync website today to learn more and take control of your financial future.
*Disclaimer: Please note that the information provided in this communication is for general informational purposes only and should not be construed as professional advice. It is not intended to substitute for personalised financial, legal, or tax advice. Please consult a qualified professional before making any decisions based on the information provided.
