Commonwealth Bank Tips One More Rate Cut This Year

Mortgage holders could be in for another reprieve, with the Commonwealth Bank predicting one final interest rate cut before the end of 2025.

CBA’s head of Australian economics, Belinda Allen, said the Reserve Bank is likely to reduce the cash rate from 3.60% to 3.35% in November. She pointed to stronger-than-expected economic momentum and surprisingly resilient consumer spending as key drivers.

Fresh data shows household spending rose 0.3% in August, marking six consecutive months of steady growth. Utilities, recreation, communication, and education led the gains, while spending on food, household goods and insurance dipped slightly.

Allen said the combination of solid incomes, a strong jobs market and the impact of earlier rate cuts is restoring confidence. “Consumers are finally finding themselves able to both spend and save again,” she noted.

Despite this, the bank doesn’t expect a series of cuts to follow. Analysts believe the RBA will likely pause after November, keeping policy steady as inflation eases and the economy seeks balance.

For mortgage holders, another rate cut would bring some relief on repayments, though economists warn households should still prepare for rates to remain higher than pre-pandemic levels for the foreseeable future.