Well praise be, we have our first RATE CUT!

The RBA has announced this afternoon that it is lowering the official cash rate by 25 basis points from 4.35 to 4.10%.

It was broadly anticipated that the RBA would ease the official cash rate after consecutive rate rises since 2023 and in more recent times, a pause in the cash rate.

Feedback from the RBA post meeting indicates that the latest inflation figures supported the RBA decision to reduce the cash rate.

So home loan customers can finally let out a sigh of relief.

So far, CBA, Bank of Melbourne and Westpac have already confirmed that they will be passing on the rate reduction in full. With the announcement by the RBA happening within the last hour, it is likely we will see more follow suit.

For some time, it could be argued that the competition between banks has been quite muted with fewer enticements for home loan customers to find a better deal that their current rate. Today's announcement and subsequent (and currently unfolding) response from lenders opens the door to potentially greater competition between banks,

Rate reductions give banks the ability to compete more on rate as they chase new business. Now with banks starting to move on their variable rates (and potentially in different percentages), it will pay more than ever to use a broker to shop around.

This lowering of the RBA cash rate and the actions to follow by the banks in regards to their variable rates can only be a positive for many home loan customers who have been feeling the pinch in recent times.

Watch this space for the flow on affect following the RBA decision by more banks.