RBA Cuts Cash Rate to 3.6%, Easing Costs for Australian Borrowers

The Reserve Bank of Australia (RBA) has cut the cash rate by 25 basis points to 3.6%, marking the third rate reduction this year after cuts in February and May, following a surprise hold in July. The move, driven by inflation easing to within the RBA's 2-3% target range and signs of a softening labor market, is expected to provide significant relief to mortgage holders, with average savings ranging from $74 to $106 per month depending on mortgage size. Analysts note that while banks have largely passed on these cuts in full so far, future cuts may see less generous pass-throughs. The rate cut aims to ease mortgage stress, which remains high, affecting over a quarter of borrowers, though some warn this could lead to higher house prices as borrowing power increases. The RBA is expected to continue a gradual easing path with at least one more rate cut predicted by the end of the year. Borrowers with mortgage rates above 5.5% are advised to review their loans to find better deals amid a competitive lending market.