The Reserve Bank of Australia (RBA) reduced the official interest rate by 25 basis points to 4.10% following today’s monetary policy meeting.

The move was widely expected, as annual inflation dropped from 3.6% in the September 2024 quarter to 3.2% in December – bringing it closer to the RBA’s target range of 2-3%. The full statement from the RBA is available to read here.

Lenders generally take their cue from the RBA’s cash rate decisions and are likely to start announcing reductions to their variable-rate products over the next few days.

With the market shifting, it could be a good time to discuss your options as some lenders may make more competitive rate adjustments than others.

Looking ahead, it’s possible the RBA will further reduce the cash rate during 2025, but that depends on movements in inflation, unemployment and the wider economy.