Aussies’ Confidence in Rate Cut Booms – But First Home Dreams Still Out of Reach

A new survey has found a majority of mortgage brokers are predicting a cut in official interest rates when the Reserve Bank board meets tomorrow.

Compare Club says its brokers believe the RBA will cut rates by 0.25% to leave the official cash rate at 3.85%. The move would provide much needed relief to home owners who would save on average between 78 and 155 dollars a month.

62% of brokers expect interest rates to fall further by the end of 2025. The majority of Aussies (60%) perceive a rate cut as a potential boost for first home buyers, although more than half (56%) also expect it to drive up property prices.

“We’ve estimated that Aussie mortgage holders are still paying over $1,300 more per month for their home loans than at this time last year.”

Our expert team of mortgage brokers is predicting a 0.25% rate cut from the Reserve Bank this week, which would offer some much-needed relief for households under pressure. If passed on in full, this would reduce repayments on a $1M mortgage by $155 per month or $1,860 a year,” said Kate Browne, Head of Research at Compare Club.

Mortgage Savings based on a 0.25% cut for an average 6.5% interest rate being cut to 6.25%

• $500k mortgage would save $78 per month
• $600k mortgage would save $93 per month
• $750k mortgage would save $117 per month
• $1 million mortgage would save $155 per month

“While that’s good news, it won’t solve everything overnight. Many borrowers are still struggling to refinance or improve their borrowing capacity due to strict servicing buffers and ongoing cost-of-living pressures.”

Muted Appetite for Refinancing
Despite growing optimism around a potential rate cut, many mortgage holders remain on the sidelines. Just 41% say they would consider refinancing if rates fall, while a

surprising 37% say they won’t refinance at all, despite how easy it is to switch and the potential for significant savings.

“Refinancing has never been simpler, but many Australians are still stuck in the mindset that it’s a complex process,” said Kate Browne, Head of Research at Compare Club. “With cost-of-living pressures still biting, it’s one of the fastest ways to free up room in the budget.”

First Home Buyers Rely on Family as Support Schemes Go Unnoticed
Breaking into the property market remains a major hurdle for first home buyers, with Compare Club’s expert Mortgage brokers reporting that many are leaning heavily on family support, often tapping into parental equity.

“Young buyers don’t have enough super to take advantage of schemes like the First Home Super Saver. It’s all about the Bank of Mum and Dad now,” said Browne. “The concern is we’re heading towards a generation that won’t buy homes, they’ll inherit them, along with their parents’ debt.”

Despite growing affordability challenges, awareness of government support remains

low. Compare Club’s research found just 43% of Australians were aware of the Federal Government’s Help to Buy scheme, while nearly half (49%) had never heard of it.

Expert Broker Insights:

• Clear shift to variable loans: 100% of Compare Club brokers say they’re seeing a strong move back to variable home loans, with customers expecting rates to fall further, meaning even competitive fixed-rate deals are being overlooked.
• Servicing is still tough: Borrowers are struggling to meet lending criteria due to the 3% serviceability buffer. Many are confused about why their borrowing capacity hasn’t improved, even as rates ease.
• Refinancing frustration: There’s interest in switching, but many can’t make the numbers work under current lender assessments.