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CBA, NAB, Westpac, ANZ predict borrowers will get mortgage relief in months: '$153 per month saving'

The Big Four banks are predicting the RBA will cut interest rates in a matter of months. Here's what that would mean for your repayments.

Tamika Seeto
·Finance Reporter
Updated ·3-min read
Big Four banks
Westpac, NAB and ANZ expect a rate cut in February, while CBA thinks it could come as soon as December. (Source: Getty)

Mortgage holders could save hundreds of dollars in a matter of months if the Big Four banks' predictions are to be believed. NAB, Westpac and ANZ expect the Reserve Bank of Australia (RBA) will cut interest rates in February, with CBA forecasting relief could come even sooner.

NAB, Australia’s third largest home loan lender, recently brought forward the timing of its first cash rate cut by three months from May to February 2025. The bank now expects there will be a 0.25 per cent cut in February, taking the cash rate to 4.10 per cent.

Canstar analysis found this would shave $92 off monthly repayments on a $600,000 loan, bringing repayments down to $3,907 per month. The savings are even bigger for larger mortgages.

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Borrowers with a $750,000 loan, would see a $114 per month drop on repayments, while those with a $1 million loan would receive a $153 per month saving. That would bring repayments down to $4,884 and $6,512 per month respectively.

Canstar data insights director Sally Tindall said all of the big banks now believed the RBA would be ready to cut rates in just over four months’ time, if not before, but this would depend on upcoming data.

“If core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year,” Tindall said.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady.”

The unemployment rate held steady at 4.2 per cent in July, while monthly inflation fell from 3.5 per cent to 2.7 per cent in August.

Are you a mortgage holder with a story to share? Contact tamika.seeto@yahooinc.com

Here are the Big Four banks current forecasts:

  • CBA: First cut in December 2024, with 5 cuts to bring cash rate to 3.10 per cent

  • Westpac: First cut in February 2025, with 4 cuts to bring cash rate to 3.35 per cent

  • NAB: First cut in February 2025, with 5 cuts to bring cash rate to 3.10 per cent

  • ANZ: First cut in February 2024, with 3 cuts to bring cash rate to 3.60 per cent

The ASX’s RBA Target Rate Tracker as at yesterday's close shows markets are predicting the RBA will first cut interest rates by 0.25 per cent in February 2025. Four cuts are predicted in total for 2025.

RBA governor Michele Bullock has stressed an interest rate cut was not on the cards in the “near-term”. But she revealed a rate hike wasn’t considered at the September meeting.

If the RBA cuts interest rates a total of five times, mortgage holders could see their monthly repayments drop by $441 on a $600,000 loan and $736 for a $1 million loan.

If the RBA cuts interest rates three times, Canstar found that would translate to a $270 monthly drop for $600,000 loans and a $450 saving for $1 million loans.

If there are four cuts, this would bring $356 in monthly repayment relief for those with a $600,000 loan and $594 for a $1 million loan.

These savings will depend on the banks passing on the interest rate cuts in full to borrowers.

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