RBA Cuts Interest Rates to 4.1%

For the first time in over a year, the Reserve Bank of Australia (RBA) has made a move on interest rates—and this time, it’s good news for homeowners!

On Tuesday, February 18th, the RBA announced a 0.25% rate cut, bringing the official cash rate down to 4.1%. It’s the first cut since November 2020, following more than 12 months of rates holding steady at 4.35%. The last time we saw a 4.1% rate was back in October 2023—so while it’s not new territory, it’s a shift in the right direction.

It’s a move that could bring some mortgage relief, but before you pop the champagne, RBA Governor Michele Bullock has made it clear—this doesn’t mean we’ve won the battle against inflation.

“We cannot declare victory on inflation just yet,” Bullock said. “It’s not good enough for it to be back in the target range temporarily—the board needs to be confident it’s returning to the target range sustainably.”

So, why the cut now? The RBA says inflation has been easing faster than expected, private demand has slowed, and wage pressures are cooling. With signs the economy is responding to higher interest rates as planned, the board decided it was time to ease up just a little—but they’re keeping a close eye on things.

For many Aussie families, this could mean a little more breathing room in the budget, especially after a long stretch of high repayments. While the full impact remains to be seen, this move signals a welcome change for borrowers feeling the squeeze.