June cash rate: what’s happening in the market

Each month, the Reserve Bank of Australia (RBA) reviews the cash rate — and when it changes, it can affect your home loan repayments. Here’s a plain-English explainer on what the cash rate is and what it means for borrowers.

What is the cash rate?

The cash rate is the interest rate that banks charge each other for overnight loans. It’s set by the RBA’s board, which meets monthly to assess the state of the economy — inflation, employment, growth, and global conditions.

When the RBA changes the cash rate, it influences the interest rates that banks charge their customers — including home loan rates. A lower cash rate generally means lower home loan rates, and vice versa.

How does it affect your home loan?

If you have a variable-rate loan, your lender can change your interest rate at any time — and they often move in line with the cash rate. If you have a fixed-rate loan, your rate stays the same for the fixed period, so cash rate changes don’t affect you until the fixed term ends.

If you have a split loan (part variable, part fixed), only the variable portion is affected by cash rate changes during the fixed term.

What to consider when rates change

• Review your budget: if rates rise, your repayments may increase. It’s worth checking whether you can absorb the change or whether you should consider fixing.
• Check your offset and redraw: if you have extra funds, keeping them in an offset account or redraw facility can reduce the interest you pay.
• Consider refinancing: if your rate is no longer competitive, we can compare across 90+ lenders to see what else is available.
• Talk to us: we monitor rates and will reach out if we see an opportunity that could save you money.

Want a rate health check?

If you’re not sure whether your current rate is still competitive, book a free chat with James. We’ll compare your loan against current options across 90+ lenders — no obligation.

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General information only. Talk to James for advice tailored to your situation.