As widely predicted, the Reserve Bank of Australia (RBA) has cut the cash rate target for the second time this year, lowering it by 25 basis points from 4.10% to 3.85%.

All four major banks—CBA, Westpac, NAB, and ANZ—along with dozens of non-major and regional lenders, have confirmed they will pass on the RBA’s rate cut to variable mortgage customers. CBA, NAB, and ANZ will implement the changes from 30 May, while Westpac’s adjustments will come into effect on 3 June[i].

The decision is welcome news for borrowers and mortgage holders, who could save hundreds of dollars a month—however, Craig Betalli, Senior Broker at Our Broker, while welcoming the RBA’s move, also warned that lower interest rates don’t guarantee easier loan approvals for all borrowers.

“Not every borrower will automatically benefit,” Craig said. “Lenders still apply strict criteria, and that’s where expert support from a broker can make all the difference.”

Craig continued, “People’s lives are complicated,” highlighting how employment type, income structure, and family circumstances can make borrowers “square pegs in round holes” when dealing with lenders.

Craig explains that while falling rates have marginally improved borrowing capacity, many applicants still struggle to fit rigid bank policies—especially self-employed borrowers, people on maternity leave, people receiving bonus and commissions, speciality industry segments such as medical or educators, or borrowers with specific expenses such as child support or private school fees.

“By working with a financial specialist such as Our Broker, who understands the lending policies of more than 20 different institutions, borrowers can identify the right fit before making any financial commitments.”

He added, “That’s the advantage of a broker—we know which lender fits before you commit.”

On the future path for interest rates, Craig believes the Reserve Bank has held rates “too high for too long,” contributing to a rise in stress on small and medium businesses and suppressing consumer spending. He predicts further cuts, with “three or four before Christmas” not off the table.

Craig said a lower interest rate environment could signal opportunities for would-be buyers such as upgraders. “That said, you want to be reasonably confident you’re heading into a lower interest rate environment.

“Therefore, our message is don’t overcommit, but don’t lose sleep either because rates aren’t likely to rise again anytime soon.”

Whether you're a first-home buyer, upgrader, downsizer, or investor, get in touch with Our Broker today on 1800 913 677 for expert home loan support.

[i] https://www.canstar.com.au/home-loans/big-four-banks-pass-second-cash-rate-cut/