NAB bring forward first RBA cut to February 2025
National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.
NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.
Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.
NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.
"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.
They added that the cadence of the cuts may be faster than its central profile.
"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.
NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.
CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.
What would a rate cut in February look like for borrowers?
According to Canstar, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.
Impact of 0.25% pt cut in February 2025 | ||
Current loan size | Drop in monthly repayment | New monthly repayment |
$600,000 | -$92 | $3,907 |
$750,000 | -$114 | $4,884 |
$1M | -$153 | $6,512 |
Source: www.canstar.com.au. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting. | ||
Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.
“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.
“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."
Joel Robinson
Joel Robinson is the Editor in Chief at Apartments.com.au, where he leads the editorial team and oversees the country’s most comprehensive news coverage dedicated to the off the plan property market. With more than a decade of experience in residential real estate journalism, Joel brings deep insight into Australia’s evolving development landscape.
He holds a degree in Business Management with a major in Journalism from Leeds Beckett University in the UK, and has developed a particular expertise in off the plan apartment space. Joel’s editorial lens spans the full lifecycle of a project—from site acquisition and planning approvals through to new launches, construction completions, and final sell-out—delivering trusted, buyer-focused content that supports informed decision-making across the property journey
