Borrowers have received some much-needed relief after the Reserve Bank cut interest rates by 25 basis points with cuts on the cards.
It brings the official cash rate to 3.85 per cent.
The cut will save borrowers around $78 a month on a $500,000 mortgage.
RBA Governor Michele Bullock says inflation continues to ease, allowing them to reduce the cash rate.
“We have got just a little more comfortable that things are going in the right direction, so we can take our foot off the brake just a little bit,” Bullock said.
Bullock admits the board discussed the possibility of an even bigger rate cut but ultimately the smaller cut was the best option.
“We did debate it and you’d expect us to debate it, quite frankly, but it wasn’t the strongest argument in the room.”
Financial markets are now expecting at least two more 25 basis points cut this year, with a 76 per cent chance of a third.
