Time waits for no broker, borrower or small business
It may have been Melbourne Cup Day on Tuesday, but to the disappointment of many, it was no cut day.
As broadly expected, the Reserve Bank of Australia (RBA) held interest rates at 3.6%, in what was clearly not a difficult decision to make.
Justifying the hold, the Monetary Policy Board said: “The recent data on inflation suggest that some inflationary pressure may remain in the economy. With private demand recovering and labour market conditions still appearing a little tight, the Board decided that it was appropriate to maintain the cash rate at its current level at this meeting.
“Financial conditions have eased since the beginning of the year, but it will take some time to see the full effects of earlier cash rate reductions.”
In a subsequent press conference, RBA Governor Michele Bullock said a rate cut was not even on the table.
“We didn’t consider cutting,” said Bullock. “We basically just talked about holding and the reasons to hold and then discussed the strategy moving out.”
No alarms, no surprises
Anja Pannek (pictured, left), chief executive of the Mortgage and Finance Association of Australia (MFAA), stressed that mortgage brokers can still help borrowers fortify their financial position despite the hold.
“Today’s decision from the Reserve Bank to keep the cash rate unchanged had been widely anticipated by most analysts and economists following the release of the September 2025 quarter inflation figures last week,” noted Pannek.
She added: “While mortgage holders will be disappointed, we encourage those who want a better rate on their loan or are considering refinancing to contact their broker. They have the expertise and skills to look at their overall financial situation and find a solution that best meets their needs.”
There were “no surprises on this one”, said Jon Gawley, managing director of NSW-based brokerage Kanebridge Finance. Gawley is expecting “some consolidation on rates” until early to mid 2026.
Peter White, managing director of the Finance Brokers Association of Australia (FBAA), highlighted the ongoing debate around whether borrowers should choose fixed or variable rates.
While the vast majority of Australian borrowers are on variable mortgage contracts, a growing number of lenders are offering highly attractive rates on short-term fixes.
According to Canstar, Macquarie Bank has gone as low as 4.99% on a two-year fix, making it one of the cheapest among the tier-one lenders.
But “brokers understand that there’s no right or wrong answer as each person’s circumstances are different”, said White. “The advantage we have is the ability and of course the obligation to act in the best interests of each customer. I’d remind brokers to encourage their customers who are seeking a rate reduction to talk to their existing lender first as this will avoid the costs of refinancing.”
Time waits for no one
Looking ahead, “our crystal ball has unemployment increasing and inflation decreasing in the coming months with another cut coming in one of the next three meets,” said Blake Buchanan (pictured, right), general manager at mortgage aggregator SFG.
Anthony Waldron (pictured, centre), chief executive of Mortgage Choice, warned against waiting.
“Our brokers are seeing competition in the property market ramping up. On one side, you have a new group of first-home buyers motivated to get their foot on the property ladder thanks to the expanded Government 5% Deposit Scheme. And on the other side you’ve got investors, with both groups often going after the same properties.”
Waldron’s message to anyone looking to buy is simple: “Don't wait for the RBA. A rate cut may not come until the RBA is satisfied that CPI is firmly within its target range, but that doesn’t mean a better home loan option isn’t available to you.
“With the new year around the corner, now is the perfect time to assess your financial situation and goals and meet with a broker to find out if you can get a better deal on your home loan.”
‘Good reason’ not to cut
Troy Phillips, director of Sydney-based FirstPoint Mortgage Brokers, reckons rates are likely on hold “for the foreseeable future”, although for good reason. “A cut in the short term just doesn’t make sense,” he said. “The RBA knows good well we’ve got a housing supply problem, not a demand problem, and pumping more cash into the system would only fuel inflation.”
Paul Evans, national sales manager at prominent SME lender Prospa, believes today’s RBA hold “should be the signal for brokers to take action”.
Evans explained: "Despite it being unlikely, many SMEs will have been hoping for a different outcome following today's rate cut decision, particularly as we enter one of the most crucial periods of the year – summer.
“A crucial trading period for SMEs, where many will require additional cash flow to stock up, hire staff, and meet customer demand.
“My advice: don’t wait for them to reach out. Initiate the conversation now, and demonstrate to your clients how quick and flexible cash flow solutions can help them capture opportunities during this busy season and keep their businesses moving forward.”
Among the Big Four banks, ANZ reaffirmed its stance that a final 25-basis-point easing in the first half of 2026 “is the most likely path for monetary policy”.
However, "there is a risk that the final rate cut we expect in February could end up occurring later”, said ANZ’s head of Australian economics Adam Boyton.
Commonwealth Bank’s head of Australia economics Belinda Allen said: “We expect the cash rate to remain on hold in the foreseeable future. Upcoming data on inflation is key in determining where the risks lie to this base case.”
