Mortgage Rates are Coming Down: Is It Too Late for the Australian Economy?

The Reserve Bank of Australia (RBA) has a big job: to manage inflation and keep people in jobs. Lately, there has been a lot of talk about whether they’ve been too slow to act. For homeowners and businesses in Melbourne, and across Australia, this is a very important topic.

As of August 2025, mortgage rates are starting to fall again, which is a welcome relief. But a key question remains: did the RBA wait too long to make these changes?

The Economy is Slowing Down

Recent numbers from August 2025 show that the economy is clearly slowing. The RBA has kept interest rates high for a long time. They even admitted that these high rates have been “restrictive” for families and businesses.

We can see this slowdown in a few key areas:

• Shopping: People are spending less money. For the June quarter of this year, real retail sales per person fell by 0.1 percent. This follows a fall in the March quarter, too.
• Inflation: The RBA wants to keep inflation between 2-3 percent. The good news is that inflation for the June quarter was 2.1 percent. The monthly rate for June was even lower at 1.9 percent. This means inflation is now at the very bottom of the RBA’s target range.
• Jobs: The unemployment rate has gone from 3.9 percent to 4.3 percent. When the RBA governor once said the economy was “too hot,” it seems things have cooled down a lot. This shows that people are losing their jobs, which may not have been necessary.

Why is the RBA’s Decision a Puzzle?

The economy has slowed down to a crawl. The most recent growth figures show a weak 1.3 percent growth a year. If it weren’t for a growing population, the economy would have shrunk! In fact, economic growth per person has been negative for almost two years.

Despite all these signs, the RBA board’s decision at its last meeting was to not cut the cash rate. It was a close vote, but the decision shocked many.

Experts often agree that if an economy slows down too much, it’s hard to get it moving again. Many people believe the RBA’s choice to keep rates high for so long is a risk. It could make the economy slow down even more.

What Does This Mean for You?

While rates are now starting to come down, the economy is still very fragile. For mortgage-holders and potential home buyers in Melbourne, this highlights the importance of getting the right advice. It’s not just about what the current rate is; it’s about understanding the bigger picture.

Instead of focusing on the RBA’s past decisions, the key now is to look forward. How can you, as a homeowner or a business owner, get the right support? This is where professional advice becomes essential.

At Ez Mortgage Broker, on 1300 050 099 or at info#ezmortgagebroker.com.au; we are here to help you navigate these uncertain times. We can help you find a new loan or refinance your current one. We focus on your financial situation, so you can feel confident in your choices, no matter what the RBA does.