RBA Holds Cash Rate at 3.60%

The Reserve Bank of Australia (RBA) has kept the official cash rate unchanged at 3.60%, matching market expectations.

This decision follows August’s 25-basis-point cut and comes as inflation climbed back to a 12-month high in September. The Monetary Policy Board has reinforced its cautious, data-driven approach as stubborn inflation remains a concern.

What the Big Banks Are Saying

• NAB – forecasts the next cut in May 2026

• CBA – still sees the cash rate falling to 3.35% by year-end, but notes this will depend on incoming data

• Westpac – has scaled back near-term expectations, pointing to persistent inflation in services

• ANZ – now expects rates to hold through 2025, unless the labour market weakens

What This Means for Households and Businesses

The RBA’s decision highlights the uncertainty around the path of interest rates. A November cut is not guaranteed and will be highly dependent on inflation, jobs, and consumer data in the coming months.

For homeowners, investors, and businesses, the message is clear: prepare for the possibility of higher-for-longer interest rates. Now is the time to review your mortgage or financing arrangements to ensure they remain competitive and aligned with your financial goals.

Need guidance? The team at S&S Finance is here to help you navigate these changes and explore your options. Reach out to us today to discuss how this decision could impact your home loan or investment strategy.

Australian Government 5% Deposit Scheme

Unlimited Places & Higher Property Price Caps for First Home Buyers – Changes Now in Effect (as of 1 October 2025) 

Major updates to the Home Guarantee Scheme came into effect on 1 October 2025, offering significant support for Australians looking to enter the property market. The scheme allows first home buyers to purchase a home with a minimum 5% deposit, while single parents can qualify with a minimum 2% deposit, all without paying Lenders Mortgage Insurance (LMI). 

What’s Changing?

• Unlimited places – no cap on the number of guarantees available

• No income limits – higher income earners are now eligible

• Higher property price caps – better reflecting current property values

• Simpler access in regional areas – the Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee

• More lender choice – over 30 participating lenders nationwide, including major banks and regional/customer-owned banks

How to Apply

• Check your eligibility

• Review the new property price caps for your area

• Apply through a participating lender or your broker (you can’t apply directly to government)

• If eligible, your lender will submit your application to Housing Australia for assessment and pre-approval

Start your journey to finding a home!

New Property Price Caps

• NSW: $1,500,000 (capital city & regional centre), $800,000 (rest of NSW)

• VIC: $950,000 (capital city & regional centre), $650,000 (rest of VIC)

• QLD: $1,000,000 (capital city & regional centre), $700,000 (rest of QLD)

• WA: $850,000 (capital city), $600,000 (rest of WA)

• SA: $900,000 (capital city), $500,000 (rest of SA)

• TAS: $700,000 (capital city), $550,000 (rest of TAS)

• ACT: $1,000,000

• NT: $600,000

(Regional centres include Illawarra, Newcastle and Lake Macquarie in NSW; Geelong in VIC; Gold Coast and Sunshine Coast in QLD.)

What This Means for Buyers

These changes deliver a significant opportunity for first home buyers who’ve been saving hard but struggling to meet current lending requirements. With no place limits, higher property caps, and more lender options, the path to home ownership will be more accessible than ever.

At S&S Finance, we can help you navigate the Scheme, understand your eligibility, and explore the right loan options to maximise your buying power.

Australian Government Help to Buy Scheme – 2% Deposit 

The Australian Government has officially launched its long-anticipated Help to Buy Scheme on Friday, 5 December 2025, marking a significant step toward improving housing affordability and supporting aspiring homeowners nationwide.

Designed as a shared-equity home purchase program, the scheme enables eligible Australians to buy a property with as little as a 2% deposit, while the government through Housing Australia contributes a substantial equity share. The government’s contribution can reach up to 30% for established homes and up to 40% for newly built properties, dramatically reducing the amount buyers need to borrow and helping them enter the property market sooner.

How the Scheme Works

Under this model, buyers provide a minimum 2% deposit and secure a home loan for the remaining portion, while the government takes an equity stake in the property. This shared-equity structure lowers mortgage repayments and reduces the long-term borrowing burden for qualified purchasers.

The scheme is capped at 10,000 places per year, with a total of 40,000 allocations available over its four-year rollout. Demand is expected to be strong, particularly among first-time buyers and those struggling to bridge the deposit gap.

Eligibility Requirements

To qualify for Help to Buy, applicants must meet a set of criteria, including:

• Satisfying income thresholds

• Intending to live in the property as an owner-occupier

• Purchasing within the designated property price caps for their region

• Not currently owning property in Australia or overseas

These rules ensure the scheme supports Australians with genuine housing needs while promoting long-term, sustainable homeownership.

Participating Lenders and Application Process

Applications for Help to Buy are submitted directly through Participating Lenders. At launch, the two approved lenders are:

• Commonwealth Bank of Australia (CBA)

• Bank Australia

Eligible buyers can apply through the lender’s Help to Buy portal. Once pre-approved, their place in the scheme is reserved. Following full approval, the government’s equity contribution is combined with the buyer’s deposit and loan amount to complete the purchase.

This streamlined process allows applicants to manage both their mortgage application and shared-equity assessment in one place, simplifying what can otherwise be a complex pathway to homeownership.

A New Pathway to Homeownership

The Help to Buy Scheme represents a major effort to make homeownership more achievable for Australians who have the income to service a mortgage but are limited by rising deposits and property prices. With government support of up to 40% for new homes, the initiative has the potential to transform market access for thousands of households.

As places are limited, potential buyers are encouraged to review eligibility criteria early and consider applying promptly through a participating lender.

Australia’s Interest Rates, Inflation & Property Market: 2025 Wrap-Up and 2026 Outlook 

How 2025 Started 

Australia entered 2025 with the RBA cash rate at 4.35%, following the aggressive tightening cycle of 2022–2023. Borrowers were already under pressure, affordability was stretched, and lending standards remained conservative. 

Interest Rate Movements Since 2024

• 2024:
  The RBA held rates steady throughout the year — no increases, no cuts — as inflation eased slowly but remained above target.

• 2025:
  The RBA cut rates three times, bringing the cash rate down to 3.60% by mid-2025.
  Importantly, there were no rate increases in 2025.

By late 2025, the RBA shifted to a neutral stance, holding rates steady and signalling caution.

Inflation: Why Further Cuts Stalled

According to ABS data, headline CPI rose to around 3.8% year-on-year in October 2025, with underlying inflation also proving sticky.
This result reinforced the RBA’s decision to pause further easing, with official commentary indicating no immediate rate cuts are expected until inflation returns sustainably to the 2–3% target band.

Property Market Performance – Focus on NSW

NSW Market Trend

Data from REA Group shows that:

• NSW property prices continued to rise in 2025, but growth slowed significantly compared to earlier cycles.

• The market transitioned from aggressive growth to a steady, price-sensitive environment.

This reflects:

• Higher base prices

• Borrowing capacity limits

• Buyer fatigue after years of rapid price increases

Affordability: The Core Issue

Despite interest rate cuts, housing affordability remains near record lows, particularly in NSW.

REA analysis highlights:

• First home buyers face intense competition in price brackets under $1.25 million

• Government first-home buyer schemes increased buyer demand but did not increase supply

• This led to higher competition, higher prices, and larger loan sizes, rather than improved affordability

Impact on Buyers

The outcome for many serious buyers has been:

• Higher debt levels

• Reduced affordability

• Increased emotional and financial stress, especially for first home buyers

Average mortgage sizes in NSW have climbed significantly, with many new loans now exceeding $700,000, reflecting elevated purchase prices rather than lifestyle upgrades.

Looking Ahead: Property Outlook for 2026

NSW & Queensland

• High prices + limited rate relief are likely to slow price growth

• Expect plateauing or modest declines in some areas

• Demand remains, but affordability will act as a ceiling

Victoria & Western Australia

• Lower relative affordability pressure

• Strong population and infrastructure drivers

• Better potential for moderate growth in select markets