The RBA has held the cash rate at 4.35%, following three consecutive rate rises.
A hold means borrowers avoid the impact of a potential fourth consecutive increase.
High interest rates are still affecting borrowing power and affordability for many Australians.
With Federal Budget changes and market conditions evolving, understanding your options may be more important than trying to predict the next move.
The Reserve Bank of Australia (RBA) has left the cash rate unchanged at 4.35% at its June meeting.
The decision follows three consecutive rate rises earlier this year and comes as policymakers continue to assess inflation, employment conditions and the potential impact of recently announced Federal Budget measures.
While a hold does not reduce borrowing costs, it does provide borrowers with a clearer picture of their current position for now.
Matthew Hawley, Aussie Broker in Queensland, said recent economic data supported the case for a pause, which was also highlighted in the RBA’s post decision media release.
"The unemployment rate increased, inflation has held flat, and the budget changes are coming in. I think it would be prudent to hold," he said.
"A hold would be in order and then they can reassess after we see the tax changes filter through."
For borrowers, refinancers, and prospective buyers, the focus may now shift from what the RBA has done to what choices are available in today's market.
Why did the RBA hold in June?
Inflation remains above target
While inflation has eased from recent highs, it remains above the RBA's 2–3% target band.
Previous rate rises are still flowing through the economy
The RBA has already increased rates three times this year and may be assessing how those changes are affecting households, businesses and spending.
Labour market conditions have softened
Recent increases in unemployment may have supported the case for holding rates steady while policymakers assess broader economic conditions.
Federal Budget measures are still being assessed
The RBA may also be monitoring how recently announced Federal Budget changes affect inflation, spending and housing activity over the coming months.
Uncertainty remains
The outlook for inflation, employment and economic activity remains uncertain, which may have contributed to the decision to leave rates unchanged for now.
What a rate hold could mean for your repayments
If the RBA holds rates and lenders keep variable home loan rates unchanged, borrowers may avoid the additional repayment costs that could have resulted from a fourth consecutive rate rise.
Example loan amount | Estimated monthly cost avoided* | Estimated annual cost avoided* |
|---|---|---|
$700,000 | ~$115 | ~$1,374 |
$1,000,000 | ~$164 | ~$1,963 |
$1,500,000 | ~$245 | ~$2,944 |
What a rate hold could mean for borrowing power
Higher interest rates continue to affect how much many Australians can borrow. However, a hold may help preserve borrowing power relative to a further increase.
Example borrowing capacity | Estimated borrowing capacity preserved* |
|---|---|
$700,000 | ~$15,000 |
$1,000,000 | ~$22,000 |
$1,500,000 | ~$33,000 |
What a rate hold could mean for you
Interest rate pauses can affect borrowers differently depending on where they are on their property journey. Here are a few things different borrowers may want to consider.
Borrower type | What a hold could mean |
|---|---|
First home buyers | • Borrowing power may stabilise, helping you better understand your position. |
Investors | • Stable rates may provide more clarity when reviewing cash flow and investment decisions. |
Refinancers | • Even if rates hold, your lender may not offer the most competitive rate available. |
What choices could you make now?
A hold may provide some breathing room, but many borrowers are still dealing with higher repayments, reduced borrowing power and ongoing cost-of-living pressures.
Samantha Harvey, Aussie Broker, said many borrowers are still surprised by how much borrowing power has changed compared to a few years ago.
"We definitely still have an affordability problem. People's borrowing power is really at its limits a lot of the time," she said.
For borrowers considering their next move, this could be a good time to:
Review your current interest rate and home loan features
Compare refinancing options
Reassess your borrowing capacity before making property decisions
Check whether your budget could accommodate future rate movements
Speak with an Aussie Broker about strategies that may suit your circumstances
Harvey said many buyers continue to focus on readiness rather than trying to perfectly time the market.
"There's never a perfect time to buy. The perfect time to buy is when you're ready," she said.
A rate hold doesn't mean your options are on hold
While a hold may come as welcome news for borrowers after three consecutive rate rises, interest rates remain elevated and affordability continues to be a challenge for many Australians.
Rather than focusing solely on what the RBA may do next, borrowers can benefit from understanding how today's rates affect their own circumstances and what options may be available.
While the RBA kept the cash rate on hold, some lenders have already made changes.
Based on Canstar's latest rate tracking, 11 lenders, including ING, BOQ, Community First and Queensland Country Bank, reduced at least one variable rate in the six weeks following the May rate decision. There are now 40 lenders offering at least one variable rate below 6% for owner-occupiers.
For first home buyers, many of these rates are available to new customers, which means a period of rate stability may present an opportunity to explore your options and secure a competitive home loan. If you already have a mortgage, it may also be worth reviewing whether your current rate remains competitive.
As lenders continue to compete for customers, there may be opportunities available that you haven't considered.
If you're following future RBA decisions, interest rate forecasts and lender movements, you can also keep up to date with our Interest Rate Tracker, which follows lender movements after each RBA decision and is regularly updated as new information becomes available.
A quick chat with an Aussie Broker can help you compare your options and see what's available based on your circumstances.
Whether you're buying, refinancing or reviewing your current loan, speaking with an Aussie Broker can help you understand your borrowing power, compare loan options, and make informed decisions based on your goals.