RBA interest rate decision: Michele Bullock under the spotlight as struggling Aussies eye long-awaited relief
Hello and welcome to Yahoo Finance's special coverage of the RBA's interest rate decision. The time has come for Michele Bullock and the RBA board to decide whether now is finally the time to cut the cash rate after more than a year sat at 4.35 per cent.
All the big banks have February down as the month millions of homeowners will be delivered a cut, yet a minority of experts are warning it's not a done deal just yet.
Follow along as we bring you plenty of insight leading up to the decision, as well as all the reaction after it.
If the RBA does finally choose to cut rates, everyone will be waiting for their lender to announce whether it will pass the central bank's decision on.
If they do, then you should start to see the change in your repayments in less than a fortnight after your own bank's announcement.
But financial advisor Nicole Gardner revealed that some lenders have a specific loan recalculation schedule, which means it could take a while for those savings to hit your account.
'I know that my bank, in particular, only recalculates mortgage repayments in March and September,' she said.
'So for me, if there's an interest rate cut in April, I could potentially be waiting until September until my bank tells me that I can start paying less towards my mortgage.
This will all depend on your loan amount and your arrangement with your bank, and if you're not sure what that arrangement is then Gardner said it's best to contact your lender to see what will happen to your repayments.
Interestingly, new modelling from Equifax found shows the full positive impact of an interest rate cut will only be seen in six to nine months.
'There often is a bit of a lag because it's only one cut and usually takes a few moves before people start to take it seriously,' AMP economist Shane Oliver explained.
'It can take a while for banks to fully pass on the cuts to customers and it also takes a while for homeowners to realise their bank account is looking better than prior to the cut.'
Let's give ourselves a recap of what's gone on since the interest rate was lifted from a record-low of 0.1 per cent in May 2022.
A good chunk of the near-three year period since has seen the rate untouched at 4.35 per cent, where it remains now. The big jumps came early on in the cycle, with four consecutive jumps of 50 basis points starting in June 2022.
The cost-of-living crisis has been all encompassing. From your supermarket visit to most bills that land on your desk, costs have been up.
The official cash rate has been held at a 13-year high of 4.35 per cent for more than a year, squeezing household budgets in a bid to force a pull back in spending to bring down inflation.
The number of Australians who are in financial hardship has risen.
More than 169,000 people reached out for help with their finances in 2024, according to figures released by the National Debt Helpline (NDH) last month.
That's a 12 per cent jump from the year before.
Concerningly, NDH CEO Peter Gartlan told Yahoo Finance there had been an uptick in scared Australians opening up about suicidal ideation linked to their current financial situation.
The helpline found that the most common issues for people were related to:
If you're feeling overwhelmed and need help dealing with financial stress, you can contact free advice and counselling from the National Debt Helpline. You can call 1800 007 007 between 9.30am and 4.30pm Monday to Friday, or reach out to Mob Strong Debt Help on 1800 808 488.
If the RBA does finally choose to cut rates, everyone will be waiting for their lender to announce whether it will pass the central bank's decision on.
If they do, then you should start to see the change in your repayments in less than a fortnight after your own bank's announcement.
But financial advisor Nicole Gardner revealed that some lenders have a specific loan recalculation schedule, which means it could take a while for those savings to hit your account.
'I know that my bank, in particular, only recalculates mortgage repayments in March and September,' she said.
'So for me, if there's an interest rate cut in April, I could potentially be waiting until September until my bank tells me that I can start paying less towards my mortgage.
This will all depend on your loan amount and your arrangement with your bank, and if you're not sure what that arrangement is then Gardner said it's best to contact your lender to see what will happen to your repayments.
Interestingly, new modelling from Equifax found shows the full positive impact of an interest rate cut will only be seen in six to nine months.
'There often is a bit of a lag because it's only one cut and usually takes a few moves before people start to take it seriously,' AMP economist Shane Oliver explained.
'It can take a while for banks to fully pass on the cuts to customers and it also takes a while for homeowners to realise their bank account is looking better than prior to the cut.'
Let's give ourselves a recap of what's gone on since the interest rate was lifted from a record-low of 0.1 per cent in May 2022.
A good chunk of the near-three year period since has seen the rate untouched at 4.35 per cent, where it remains now. The big jumps came early on in the cycle, with four consecutive jumps of 50 basis points starting in June 2022.
The cost-of-living crisis has been all encompassing. From your supermarket visit to most bills that land on your desk, costs have been up.
The official cash rate has been held at a 13-year high of 4.35 per cent for more than a year, squeezing household budgets in a bid to force a pull back in spending to bring down inflation.
The number of Australians who are in financial hardship has risen.
More than 169,000 people reached out for help with their finances in 2024, according to figures released by the National Debt Helpline (NDH) last month.
That's a 12 per cent jump from the year before.
Concerningly, NDH CEO Peter Gartlan told Yahoo Finance there had been an uptick in scared Australians opening up about suicidal ideation linked to their current financial situation.
The helpline found that the most common issues for people were related to:
If you're feeling overwhelmed and need help dealing with financial stress, you can contact free advice and counselling from the National Debt Helpline. You can call 1800 007 007 between 9.30am and 4.30pm Monday to Friday, or reach out to Mob Strong Debt Help on 1800 808 488.Sign in to access your portfolio
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