In a significant move today, the Reserve Bank of Australia (RBA) reduced its benchmark cash rate by 25 basis points, bringing it down from its 13-year high of 4.35% to 4.10%.

The immediate beneficiaries of the rate cut are borrowers, particularly homeowners with variable-rate mortgages. In response to the RBA's announcement, Australia's "Big Four" banks—Commonwealth Bank of Australia, National Australia Bank, Westpac, and ANZ Group—have each committed to passing on the entire 25 basis point reduction to their customers. These adjustments are slated to take effect between late February and early March 2025.

Should I fix my loan or choose a variable interest rate? 🤓 Discover the Pros and Cons of fixed and variable interest rates.

Choosing between a fixed or variable interest rate option depends on several important factors, including your current financial situation, overall risk tolerance, and prevailing market conditions. In Australia, the Reserve Bank of Australia (RBA) set the cash rate, or interest rate, at 4.35%. It's speculated that we are at the peak of the interest rate cycle.

So when do the big four banks think rates will go down?