iscoverThe Reserve Bank has delivered its highly anticipated September interest rate decision. Accounting Home Loans breaks down what the rate call will mean for prospective home buyers.
RBA delivers September 2025 rate call
30 September 2025
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9 minute read
On Tuesday (30 September), the RBA held the cash rate steady at 3.6 per cent, aligning with market and economist expectations.
In its September statement on monetary policy, the RBA board said: “Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and potential supply closer towards balance. Both headline and trimmed mean inflation were within the 2–3 per cent range in the June quarter. Recent data, while partial and volatile, suggest that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy.”
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The hold was widely anticipated by markets and economists after the RBA cut interest rates by 0.25 percentage points in August as part of its cautious and gradual easing cycle.
At market close on Monday (29 September), the ASX RBA rate tracker priced in a 96 per cent chance of a hold and a 4 per cent chance of a cut.
Accounting Home Loans director of sales Cullen Haynes told Accountants Daily that today’s decision had provided continued stability for borrowers.
“The current average interest rate range is now 4.9 per cent to 5.6 per cent. If you didn’t receive a rate reduction from the August cash rate cut, make sure to get in contact with your lender or broker as soon as possible,” he said.
“If you’re considering purchasing a property, now is a good time to get your pre-approval in place. With three cash rate cuts in 2025, your borrowing power has likely improved, potentially expanding your options in the market. Having pre-approval ready ensures you can move quickly when you find the right property.”
Despite the RBA’s decision to hold interest rates steady, Haynes said he expected the housing market to continue to heat up off the back of recent interest rate cuts and the incoming Home Guarantee Scheme.
“Especially with the expansion of the Home Guarantee Scheme from 1 October, which will give first home buyers more opportunities to enter the market sooner. We expect the market to heat up this Spring and are already seeing signs of it as buyers benefit from increased borrowing capacity and more competitive interest rates,” he said.
“Don’t forget, accountants can access certain market advantages, such as home loans with just a 10 per cent deposit and waived Lender’s Mortgage Insurance. These benefits can make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for accountants to gauge what’s best for you.”
In the lead-up to the RBA’s September interest rate decision, Commonwealth Bank, Westpac, NAB, and ANZ each predicted that the RBA would hold the cash rate steady in September.
Last Wednesday (24 September), it was revealed that the August headline inflation rate had climbed to 3.0 per cent, its highest rate since July 2024. The hotter-than-expected inflation reading dampened any lingering expectations of a September rate cut.
“Anyone who thought there was a lingering chance of a cut next week will have ruled it out following this week’s August partial inflation data,” Luci Ellis, chief economist at Westpac Group, said last Friday (26 September).
Prior to the September interest rate decision, all of the ‘big four’ banks expected another 25-basis-point rate cut in November, although forecasts are set to change based on incoming data flows, including the September quarter CPI and labour market data.
Following the RBA's Tuesday decision, RSM economist Devika Shivadekar echoed this prediction, saying: "We continue to hold our view that the next 25bps cut will come in November, ending the year at 3.35 per cent."
Commonwealth Bank economists noted that the August CPI data indicated ‘material upside risks’ to September’s quarterly inflation, but softer employment figures and moderating wage growth could bolster the case for a November rate cut.
“While a November timing of the next cut is now less certain, it remains our base case. We do not read either the August result or latest geopolitical developments as implying a renewed inflationary trend,” Westpac’s Ellis said.
BDO chief economist Anders Magnusson said that the RBA would likely hold off on further interest rate cuts until the economy showed signs of strain.
"Looking ahead, the RBA has one or two more cuts available before policy settings return to neutral. It will want to hold onto these until the economy shows it really needs them. Beyond that, further cuts would only come in response to bad news, not a scenario anyone should wish for," he said.
RSM Australia economist Devika Shivadekar said that the decision to hold reflected the uncertainty of the current economic landscape.
"With global trade tensions and geopolitical risks lingering, and the full impact of earlier rate cuts still playing out, the RBA is preferring to 'wait and see' while remaining ready to act if conditions change," she said.
Article updated to include additional commentary.
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