Reserve Bank of Australia cuts interest rates by 25 basis points

February 03, 2015
Rikki Stanley

The Reserve Bank of Australia has today made its first decision for the year, and cut the official cash rate by 25 basis points down to a new record low of 2.25%.

This is the first cut to the cash rate in 18 months.

The RBA was forced to take action in response to poor economic data in recent months, combined with a disappointing consumer sentiment result in January.


Consumer Sentiment:

In January, confidence only grew by just 2.4% ( according to the Westpac Melbourne Institute of Consumer Sentiment Index), which leaves it  at the level it was in the immediate aftermath of the Federal Budget,  and still down by just short of 10% on this time last year,  February 2014.


Business Confidence

The National Australia Bank's Monthly Business Survey found that business confidence is still sluggish, and sitting well below long run averages. Business conditions  did ease for the second month running, however there with no momentum building,  this suggests that the economy is currently very patchy.


Will lenders follow this lead and cut rates?

If you are a mortgage holder and are hoping to see your lender reduce rates as well, only time will tell. It is however good encouragement for many of Australia’s lenders to follow the RBA’s lead, and reduce the interest rates on their own suites of home loan products.

If lender’s do pass on the latest interest rate cut, and particularly if they reduce their rates by the full amount, then it is the expectation that more and more home buyers will take advantage of these historically low rates.



The cost of borrowing:

Now may be the right time to review your home loan, or take the next step towards buying your first home, given that the cost of borrowing is more affordable now than it has been in over 18 months.


Which lender?

If you are thinking about switching lenders, it is not just the interest rate that you need to take into consideration. Deslie Taylor from Mortgage Choice in Ormeau can help you compare all the fees and features associated with your loan, and ensure it is the most suited to your personal needs.


If you are ready to see how today’s interest rate cut effects you, call us today or:



Or, for further information on this or any other topic, please contact your local Mortgage Choice broker,


Deslie Taylor on:


Mobile 0418 715 286,

Phone 07 5549 0800



Visit Shop 15, 174-176 Pascoe Rd, Ormeau QLD 4208


Or simply click on the ‘contact us’ tab on this page.


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Deslie is looking forward to helping you with your home loan options today.  Thanks for reading our blog.


Important information

This article is for general information purposes only and does not constitute specialist advice. It should not be relied upon for the purposes of entering into any legal or financial commitments. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances, and specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy.

Posted in: Interest rates

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