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RBA September Cash Rate Update
RBA September Cash Rate Update

30 September 2025

RBA Holds Cash Rate at 3.6%: What This Means for Your Home Loan in October 2025

Danh Mai
Property Finance Specialist
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The Reserve Bank of Australia (RBA) has delivered a mixed message to Australian mortgage holders, keeping the cash rate steady at 3.6% in its September 2025 meeting while signalling caution about future moves.

This decision comes after three consecutive rate cuts earlier this year, bringing relief to millions of borrowers who have seen their monthly repayments drop by an average of $330 for a $700,000 mortgage.

What Happened at the September RBA Meeting?

According to the RBA's post-meeting statement, the decision to hold rates was unanimous among board members.

Governor Michele Bullock cited stronger-than-expected economic data and persistent inflation pressures as key factors behind the pause.

"Domestic data has been in line or a little stronger than our forecasts since the August rate cut"

"Inflation remains within the target range, but recent data indicate there could be a bit more upward pressure than we thought."

- Bullock explained during her post-meeting address.

The monthly inflation reading came in at 3%, higher than economists expected, with services inflation proving particularly stubborn.

This has raised concerns about the pace of disinflation moving forward.

Impact on Australian Mortgage Holders

For the millions of Australians with variable rate mortgages, today's decision means no immediate relief from current repayment levels.

However, it's important to remember the significant savings already delivered this year.

Treasurer Jim Chalmers noted that households with a $700,000 mortgage are saving approximately $4,000 annually thanks to the three rate cuts delivered in February, May, and August 2025.

Despite this relief, many borrowers continue to face payment shock as they roll off ultra-low fixed rates secured during the pandemic. Some households are experiencing monthly payment increases of up to $1,500 as they transition from fixed rates below 2% to current variable rates around 5.5%.

Our Perspective: Strategic Opportunities Amid Uncertainty

At Shaper Finance, we see today's RBA decision as a strategic pause rather than the end of the easing cycle. The central bank is clearly taking a data-dependent approach, which creates both challenges and opportunities for borrowers.

For Current Borrowers:

  • The rate hold reinforces the importance of proactive loan management.
  • With the RBA signalling caution, borrowers shouldn't wait for further rate cuts to optimise their mortgage structure.
  • Now is an ideal time to review your loan features, consider refinancing options, or explore split loan strategies that provide protection against future rate volatility.

For Prospective Buyers:

  • The pause in rate cuts doesn't diminish the improved affordability created by earlier reductions.
  • Combined with the expanded Home Guarantee Scheme launching October 1st, first home buyers still have significant opportunities to enter the market with competitive borrowing conditions.

Market Outlook:

  • We expect the RBA to remain cautious through the remainder of 2025, with any further cuts likely dependent on clearer signs of demand weakness and sustained disinflation.
  • The November meeting will be crucial, as the board will have access to September quarter inflation and labour market data.

What Should You Do Next?

  1. Review Your Current Rate: Even if you're not ready to refinance, understanding your current position relative to market rates is essential. Many borrowers are paying significantly more than necessary.
  2. Consider Loan Structure: Split loans combining fixed and variable components can provide stability while maintaining flexibility for future rate movements.
  3. Explore Refinancing: With over 50 lenders in the Australian market, there are often better deals available than your current arrangement, regardless of recent rate changes.
  4. Plan for Uncertainty: The RBA's cautious stance suggests continued volatility. Ensure your mortgage structure can handle potential rate movements in either direction.

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The RBA's decision reflects a complex economic environment where progress on inflation must be balanced against household financial stress.

While today's outcome may disappoint those hoping for immediate relief, the central bank's measured approach provides stability and predictability for long-term financial planning.

For personalised advice on how today's RBA decision affects your specific situation, speak with our experienced mortgage specialists who can help you navigate these changing conditions and optimise your home loan strategy.