Shift follows lender's move to reduce fixed rates
ANZ has revised its interest rate forecast and now expects the Reserve Bank of Australia (RBA) to cut the cash rate by 25 basis points at its meeting on July 8.
The shift brings the bank in line with its Big Four counterparts, all now anticipating a rate cut next week.
The move follows weaker-than-expected retail sales data, stalled consumer confidence, and growing global uncertainty, particularly around US trade policy. ANZ’s economics team had previously forecast the first cut in August, with another to follow in February 2026. The updated outlook now suggests cuts in both July and August, which would bring the cash rate down to 3.35%.
The revised forecast also comes shortly after ANZ reduced its fixed mortgage rates, positioning itself competitively in a market already seeing heightened pricing activity.
“(Yesterday) morning, ANZ was holding out for August, but in the afternoon, they’ve changed their tune,” said Mozo finance expert Rachel Wastell (pictured above left). “It’s a quick pivot but it does line up with the rate cut energy we’re already seeing across the fixed rate market.”
Canstar’s data insights director Sally Tindall (pictured above right) also commented on the move. “ANZ has finally jumped on the July rate cut bandwagon, joining the rest of the big four in tipping the RBA to move on Tuesday,” she said. “That’s a powerful chorus and one borrowers will be hoping hits the right note.”
For mortgage holders, the implications of a rate cut could be immediate. According to Mozo, owner-occupiers with a $500,000 loan on the average variable rate could save around $76 per month, or $918 annually, if lenders pass on the full cut. Canstar estimates that someone with a $600,000 loan could save around $90 per month.
While fixed rate deals are becoming more competitive, Wastell cautioned borrowers to weigh the broader product features and flexibility, particularly if the RBA continues easing.
“Fixed rates offer certainty, but they come with trade-offs,” she said. “If the RBA does cut again, and there’s a good chance it will, the variable rate market will shift too.”
Despite the growing consensus, Tindall warned a cut is not guaranteed. “The RBA’s preferred measure of inflation is the quarterly CPI results, which aren’t due out until the end of July, and Australia’s unemployment rate isn’t putting heat on the RBA,” she said.
“The board may choose to hold off for another month to give the May cut more time to filter through our economy.”
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