Australia’s borrowers were watching closely this September, waiting to see whether the Reserve Bank of Australia (RBA) would shift the cash rate again. Instead, the board opted for stability, maintaining the rate at 3.60%. For households, this means repayments remain steady for now, but the uncertainty surrounding future cuts continues to loom.
This hold comes at a critical time for Australians, who are juggling higher living costs, mortgage stress, and mixed economic signals. While some see relief in knowing repayments won’t rise, others are left asking: when will rates actually start falling?
In this blog, we’ll unpack the RBA’s September decision, what drove it, and what it could mean for borrowers, first-home buyers, and the property market moving forward.
Why the RBA Held Rates in September 2025
The Reserve Bank of Australia’s decision to hold the cash rate steady at 3.60% was shaped by recent inflation data. The Consumer Price Index (CPI) rose to 3% in August, up from 2.8% in July, placing inflation at the very top of the RBA’s 2–3% target band. While the increase was modest, it signalled that price pressures are still present, and a further rate cut could risk fuelling inflation again.
Economists and major banks had also suggested that September was too soon for another adjustment, with November flagged as the more likely point for a move. The RBA has reiterated its commitment to a long-term perspective, preferring to allow time for earlier cuts to take effect before taking additional steps.
How the Decision Impacts Borrowers
For Australian borrowers, a cash rate hold can be a mixed blessing. Holding steady at 3.60% means no immediate rise in repayments, offering some breathing room for households already struggling with higher living costs. Variable-rate mortgage holders, in particular, can take comfort knowing their repayments won’t increase, at least for now.
On the other hand, the hold also means no immediate relief. With inflation still at 3%, lenders remain cautious, and borrowers hoping for lower rates will likely need to wait until later in the year, or even 2026, before seeing meaningful changes. For those considering refinancing or entering the property market, the competition among banks may present opportunities, as lenders continue to push for new business with sharper deals and incentives.
Ultimately, the RBA’s decision highlights the balancing act between economic stability and borrower relief. It underscores the importance of reviewing your lending strategy to ensure your loan structure aligns with both current conditions and your long-term goals.
What Experts Are Saying About the Hold
Economists and industry leaders weren’t surprised by the September hold. Many noted that the higher-than-expected CPI data left the RBA little choice but to maintain its current stance. At the same time, the Finance Brokers Association of Australia (FBAA) reminded Australians that relying on rate cuts is a risky strategy. They urged borrowers to plan for multiple scenarios, whether rates remain steady, rise again, or eventually drop, and to review their finances regularly to stay prepared.
Conclusion
The RBA’s decision to hold the cash rate at 3.60% is neither good news nor bad news on its own. For borrowers, it provides short-term stability but delays the relief many were hoping for. With inflation still within the target band, the path ahead could bring further holds before any meaningful cuts are implemented.
The key takeaway? Rate changes are outside your control, but how you structure your loan and prepare for different scenarios isn’t. Staying proactive with your finance strategy ensures you’re ready whether rates move down later this year or remain steady into 2026.
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Read Next: Understanding the RBA’s August Rate Cut: What It Means for Your Mortgage
TL;DR
- RBA kept the cash rate at 3.60% in September 2025 after August’s 25bps cut.
- The decision was shaped by inflation rising to 3%, the upper limit of the target band.
- Borrowers get short-term repayment stability but no immediate rate relief.
- Experts say November could be the earliest chance for cuts, but caution remains.
- Key takeaway: focus on reviewing your finance strategy, not predicting RBA moves.
FAQ
The hold was due to inflation edging up to 3%, the top of the RBA’s target band. Cutting further now could risk reigniting inflation, so the bank chose stability.
Your repayments won’t rise for now, offering stability. However, there’s no immediate relief — lower rates may not arrive until late 2025 or even 2026.
Yes. While borrowing costs remain steady, lenders are competing more aggressively for new business, which may create opportunities for more favourable loan deals.
Economists suggest November 2025 is the next possible cut, but predictions vary. The RBA has stressed it’s taking a long-term approach.
Rather than waiting for cuts, review your loan strategy. Structuring your finances properly ensures you’re prepared whether rates fall or remain steady.
