By Brett Warren May 14, 2025

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More Banks Cut Interest Rates – But What Does It Really Mean for You?

Property Market News
More Banks Cut Interest Rates – But What Does It Really Mean for You?

Key takeaways

Five more lenders, including Macquarie and ING, have trimmed fixed home loan rates.

Around 18 lenders have reduced rates in recent weeks — a strong signal they expect the RBA to start cutting the cash rate soon.

Lower fixed rates often precede RBA rate cuts — they reflect future expectations, not current settings.

This shift in pricing could be a sign we’re past the peak of the interest rate cycle.

Investor sentiment is still cautious, but early movers could benefit before the market heats up again.

Timing the market is risky — but recognising turning points is how wealth is built.

In recent weeks, a quiet shift has been happening behind the scenes in our financial system.

While the Reserve Bank of Australia (RBA) continues to hold the official cash rate steady at 4.35% - at least in the short term- a number of lenders, including five more just this past week, have been trimming their fixed-rate home loan offers.

Now, this might not have grabbed headlines the way an RBA rate move does, but it’s a significant signal of what’s coming.

And if you’re a property investor or planning to be one, you should pay close attention.

Rba

What's actually happening?

Banks like Macquarie, ING, Bank Australia, Reduce Home Loans, and Easy Street (a division of Community First Credit Union) have all reduced some of their fixed-rate home loan products.

We’re not talking about massive cuts; most are shaving off 0.05% to 0.25%, but the direction is clear: the tide is turning.

This brings the number of lenders that have trimmed rates to around 18 in the last month alone.

Why?

Because the money markets are pricing in future RBA cuts.

And banks are forward-looking animals, they’re adjusting their products now in anticipation of easier monetary policy in the not-too-distant future.

Fixed rates are falling while variable rates stay high

Here’s the interesting part — while fixed rates are quietly declining, variable rates remain stubbornly high.

According to RateCity, the average variable rate is still above 6.8%, with many owner-occupiers and investors sitting on rates in the 7% range.

So we’ve got a situation where fixed rates, often a window into where markets think interest rates are going, are falling, while variable rates reflect the reality of today’s tight policy.

That tells me something important: markets believe inflation is coming under control, and rate relief could arrive sooner than many think.

What does this mean for property investors?

Here’s how I see it:

Timing is everything: While most borrowers are still feeling the sting of 13 RBA rate hikes since 2022, the market always moves ahead of the news cycle. Lower fixed rates signal that we may be past the peak of this interest rate cycle.
Smart money is positioning now: With inflation easing and consumer spending softening, the RBA will most likely drop interest rates three or four times more this cycle. Investors who lock in strong property assets today, while competition is still manageable, could benefit as rates ease and sentiment shifts.
Don’t bet on deep cuts: I’m not suggesting we’re heading back to the ultra-low rates of 2021 — far from it. But even a couple of modest cuts could reawaken buyer demand, fuel price growth, and push more investors back into the market.

Should you fix your rate?

That’s the question many borrowers are now asking, and the answer isn’t black and white.

Yes, fixed rates are falling, but they’re still not dramatically lower than variable rates.

And most of the sharp discounts are for shorter fixed terms, one to two years.

So, unless you’re risk-averse or need certainty for budgeting, fixing now could be locking in rates just before they start falling more broadly.

The real takeaway here is strategic: watch what the banks are doing, not just what the RBA is saying.

Banks are often ahead of the curve, and they’re telling us that the next move is likely down.

The bottom line

We’re not out of the woods yet.

Consumer sentiment is fragile and inflation remains sticky in some corners of the economy.

But green shoots are emerging.

And for property investors who understand how the cycle works, who zoom out and look at the long game, this could be one of those turning points that separates the opportunistic from the reactive.

So if you’re in a position to act, with finance in place and a long-term strategy, now’s the time to review your portfolio, assess your borrowing structure, and potentially get ahead of the next leg of the property cycle.

As I always say, don’t try to time the market — time in the market is what builds wealth.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.