RBA Drops Interest Rates Feb 2025
Robert Owen- Feb 18
- 1 min read
Updated: Mar 3
The RBA has lowered interest rates by 0.25% basis points lowering the effective cash rate from 4.35% to 4.10%.
As most financial analysts predicted, the RBA in their first meeting for 2025, have reduced rates at today's February board meeting.
What does this mean?
Variable Rates
Banks and lenders should start to reduce their variable rates from today onward (for around two weeks). Good news for borrowers!
If you are on a current variable rate, expect to see a reduction; however, your lender may not pass on the full 0.25% reduction. Let's talk if they do not!
Fixed Rates
Some lenders, in anticipation of the rate cut, already lowered their fixed rate offering, whilst others will take longer (if at all) to move on their fixed rates for new customers.
If you are on a fixed rate, do not expect your rate to change during your contracted period but it might be worth assessing whether now is the time to switch to variable. Read your loan contract carefully to identify break clauses as these can be expensive but not all lenders charge to switch products.
Further reading: https://www.rba.gov.au/media-releases/2025/
