The Reserve Bank of Australia (RBA) has reduced the official cash rate by 25 basis points to 3.85% following its most recent board meeting on 20 May 2025.
\nThis is the second rate cut this year. Since 2020 rates had only increased or held steady.
\nIf banks and other lenders choose to pass on the rate cut in full, people with a $650,000 mortgage could save around $1000 a year on their repayments.
\nAs of 4 March 2025, Canstar listed the average basic variable rate mortgage at 6.41% and the average 1 year fixed rate mortgage at 6.15%.
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\nWill banks pass on the full rate cut?
\nFollowing the February 25 basis point cut, lenders, including the Big Four banks, passed on the full cash rate reduction to borrowers.
\nHave a mortgage? Contact your lender or visit their website to see if the RBA decision has affected your repayments.
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\nALP housing policies expected following election win
\nCentral to the incoming Albanese Government\u2019s agenda is an expansion of the “Help to Buy” scheme, a shared equity program designed to assist first-home buyers.
\nEligible homebuyers could purchase a home using only 5% of the price as a deposit, with the government contributing up to 40% equity for new homes and 30% for existing properties.
\nAnother election policy announced was the investment of $10 billion to construct 100,000 homes exclusively for first-home buyers.
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\nWhat this could mean for homebuyers
\nLower interest rates and government policies that support first homebuyers or people on low incomes could make the housing market more accessible.
\nHowever, with more potential buyers looking there could be more competition to secure properties on the market.
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\nLearn more about support available for homebuyers in Australia and Victoria
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\nAustralian Government
\nHousing Australia \u2013 Home Guarantee Scheme
\nHousing Australia \u2013 Regional First Home Buyer Guarantee
\nHousing Australia \u2013 Help to Buy scheme
\nHousing Australia \u2013 Family Home Guarantee (single parents)
\nHousing Australia \u2013 Tools and resources
\nTreasury \u2013 Supporting people into home ownership
\nAustralian Taxation Office \u2013 First home super saver scheme
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\nVictorian Government
\nHousing Victoria \u2013 Home Ownership
\nHousing Victoria \u2013 Help to buy a home
\nState Revenue Office \u2013 Buying a property
\nState Revenue Office \u2013 Homebuyer Fund
\nState Revenue Office \u2013 First Home Owner
\nState Revenue Office – Apply for a first home buyer duty exemption, concession or reduction
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\nEligibility
\nSchemes and programs have eligibility criteria that determines how they can be accessed.
\nIf you\u2019re applying, please read the information from the relevant government department or agency carefully and seek assistance to understand your obligations if successful.
\nGovernment programs are subject to change and up to date information about the policies and programs should be sought directly from the organisation administering the policy.
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\nDisclaimer
\nGrants subject to State Government eligibility rules. DFC makes no warranties or representations regarding eligibility rules or criteria for any government grants.The advice, opinions and insights of this article are general in nature and based on DFC\u2019s analysis of current market trends and government policy as of the date of publication. This article does not take into account your personal financial circumstances or objectives and may not always be entirely accurate, complete or current.\u00a0We recommend speaking to an independent legal or financial advisor before making any binding decisions.<\/p>\n","protected":false},"excerpt":{"rendered":"
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