Up next
Author
Share and Follow
FacebookXRedditPinterestWhatsApp

ANZ has joined the Commonwealth Bank in predicting an interest rate cut in February, which could provide relief to mortgage holders following a sustained rate of 4.35 per cent.
The cash rate has stayed the same since November 2023, with Reserve Bank of Australia (RBA) governor Michele Bullock saying that taming inflation is a “balancing act”.
“With inflation coming down and employment growing, we think we remain on the narrow path,” she said after the central bank’s December meeting.

So, what does the RBA consider when setting its cash rate target, and what do the big four banks think lies ahead?

What are the banks predicting?
ANZ and CommBank are both forecasting a rate cut when the RBA next meets in February.
Westpac and NAB disagree and are predicting Australians will have to wait for the third RBA meeting in May before the cash rate target is changed.
The banks also differ when it comes to estimating how many cuts will occur throughout 2025.
ANZ is the most conservative and is anticipating two cuts this year, while CBA and Westpac both speculate four will occur.

NAB is projecting five rate cuts.

Independent financial comparison site Canstar has estimated that a reduction in monthly repayments from one cut could be up to $92 on a $600,000 loan with 25 years remaining on the term.

How much could Australians save?
On Friday, Canstar released data calculating drops in mortgage repayments for each of the bank’s predictions.
If five rate cuts are realised, the drop in monthly repayments could be as high as $441 per month for a borrower with a $600,000 loan and 25 years remaining.

If just two rate cuts occur, the same borrower will save $182 each month.

Data provided by Canstar

NAB is expecting the greatest relief for borrowers with five cuts compared to ANZ’s forecast for only two cuts.

A rate cut is increasingly likely this February, but Canstar data insights director Sally Tindall said to “prepare for any possibility”.

“The big question is just how many rate cuts the RBA will end up handing out. If you’ve got a mortgage, be prepared for every possibility,” she said.
“A rate cut in February is increasingly likely, however, with over five weeks to go until the next Board meeting and the RBA firmly focused on incoming data, this could change.”

There are several measures that influence RBA decision-making, including inflation and unemployment.

Looking to inflation and employment rates

ANZ’s new prediction of a February rate cut follows the on Wednesday.

The Australian Bureau of Statistics reported CPI at 2.3 per cent in the 12 months leading to November, within the RBA’s target of 2 to 3 per cent.

ABS head of price statistics Michelle Marquardt said government electricity rebates had a large impact on CPI.
“In some states and territories, households received two rebate payments in October in lieu of not receiving a payment in July. From November, most households have received one payment,” she said on Wednesday.
“As a result, electricity prices fell 21.5 per cent in the 12 months to November, compared to a fall of 35.6 per cent to October.”
Meanwhile, underlying inflation was at 3.2 per cent in November, down from 3.5 per cent in October.
The RBA’s target for this form of inflation is 2 to 3 per cent.
Tindall said analysts would also be looking at soon-to-be-released employment data.
“All eyes will be on next week’s ABS Labour Force data and the quarterly CPI results released at the end of the month,” she said.

“If core inflation continues along the same trajectory as we saw in the more volatile monthly dataset, then we could well see a rate cut.”
Share and Follow
FacebookXRedditPinterestWhatsApp
You May Also Like
Young racegoers are seen in the rain during Champions Day at Flemington Racecourse.

Striking Temperature Shift Observed in Australian City

Wild weather has lashed Melbourne on the final day of the Melbourne…
SIR CLIVE WOODWARD: The key lesson Fiji taught England ahead of their tough All Blacks test - and why Steve Borthwick should switch up his backline after a missed opportunity

Unlocking Success: How Fiji’s Lessons Can Transform England’s Strategy Against the All Blacks

England’s rugby team is on a remarkable streak, having secured victory in…
Scotland 17 New Zealand 25: Deja Blue as Scots are forced to wait for win over All Blacks

Scotland’s Narrow Defeat to New Zealand: All Blacks Extend Unbeaten Streak as Scots Await Historic Victory

Scotland’s elusive quest to defeat New Zealand remains unfulfilled, as the familiar…
A flight is listed as cancelled on a display at San Diego International Airport Saturday, Nov. 8, 2025, in San Diego. (AP Photo/Gregory Bull)

US Travel Chaos: Over 1,000 Flights Canceled Amid Prolonged Government Shutdown

US airlines again cancelled more than 1000 flights today, the second day…
Aerial shot of Porepunkah

Gunshot Echoes from Bushland Following Dezi Freeman’s Escape

On November 5, law enforcement officials carried out firearms testing near Barrett…
NSW protests

Neo-Nazi Protest Unfolds Outside NSW Parliament, Leaving Police Commission Uninformed

Neo-Nazis have used NSW state parliament as their stage today to launch…
Having high cholesterol in the blood can lead to a buildup called "plaque" on the walls of the arteries, raising the risk of cardiovascular disease.

Breakthrough Daily Pill Shows Promise in Lowering Cholesterol: New US Trial Results Revealed

For individuals struggling with high cholesterol, even after implementing lifestyle changes and…

Ukrainian-Australians Urge Enhanced Measures Against Russian ‘Blood Oil

Key Points Experts say a “shadow fleet” continues to bring Russian oil…