The Reserve Bank of Australia cut interest rates on Tuesday afternoon for the first time since November 2020, after keeping rates on hold at 4.35 per cent for more than a year.
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00:00A crowd-pleasing decision, and the smile showed the Governor knew it.
00:14The rate cut means homeowners with a $500,000 mortgage should see their repayments fall
00:19by $77 a month, and Australians with a million dollar mortgage will see their repayments
00:24drop by $154.
00:28It's welcome relief for this struggling dad and his family.
00:31It's going to save us about $1,000 a year, just this first interest rate cut, so that's
00:37not insignificant.
00:38The big four banks moved within minutes, announcing they'll pass on the rate cut in full.
00:43But it'll still take about a couple of weeks before you notice the rates on your home loan
00:46come down.
00:47As a borrower, you have the choice of reducing your minimum monthly repayment, or keeping
00:52them as they are in order to pay off the loan quicker.
00:54Either way, it'll cost you less.
00:57That's a huge change for us, that's going to make a big difference.
00:59Pretty good for a fast home like buyers.
01:02But further cuts aren't guaranteed, with the RBA Governor saying the inflation fight isn't
01:07over.
01:08What are the chances the Reserve Bank is won and done when it comes to interest rate cuts,
01:12and today's cut could be the only one that we see?
01:14I couldn't say.
01:17What I would say is that the market is expecting quite a few more interest rate cuts.
01:23Whether or not that eventuates is going to depend very much on the data.
01:27Economists say there could be some cuts ahead.
01:29We think that we'll get another two, but it's not like we're going to see back-to-back rate
01:34declines.
01:35I'd be reasonably of the view that we won't get another cut ahead of the election.
01:42But households are hoping they won't have to wait too long.