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What Borrowers Should Expect Ahead of the RBA’s Final Meeting for 2025
The Reserve Bank of Australia (RBA) will hold its final cash rate meeting for 2025 on 9 December.
Hopes of a rate cut before Christmas have been dampened with the latest data showing inflation continues to rise.
Inflation Data Paints a Clear Picture
New figures from the Australian Bureau of Statistics (ABS) have caught the attention of economists and homeowners alike.
The monthly CPI indicator showed headline inflation at 3.8%, higher than the RBA anticipated for this time of year.
As Mark Bouris, Executive Chairman of Yellow Brick Road, put it:
“The inflation number came out from the Australian Bureau of Statistics at 3.8% as the headline number, and 3.3% as the underlying trimmed mean. It does not augur well for a rate reduction either in December or early next year.”
Mark emphasised that unless inflation softens soon, the first RBA meeting in February could even result in a rate increase:
“If we still get another bad inflation read in January, my gut feeling is there is a very big chance there could be a rate increase in the February meeting. Not great news.”
So, what are the major banks saying and what does all this mean for current and future borrowers?
Major Bank Forecasts for December
Australia’s four major banks are now united in their view: a rate cut this December is very unlikely.
| Bank | December Call | Expected Cash Rate at End of Cycle |
| CBA | Hold (3.60%) | No further cuts this cycle |
| Westpac | Hold (3.60%) | 3.10% |
| NAB | Hold (3.60%) | No further cuts this cycle |
| ANZ | Hold (3.60%) | 3.35% |
Source: Canstar
Economic commentary from all banks points to inflation as the sticking point. Higher power bills, persistent demand (especially for property), and increased government spending have slowed progress towards the RBA’s inflation target.
What This Means for Borrowers
The RBA paused rate changes after three cuts earlier in the year, holding steady since August. For now, most borrowers won’t see an immediate difference in their repayments. However, it’s important to check whether your lender has passed on the full benefit of any earlier reductions.
Throughout 2025, some banks adjusted rates promptly, while others delayed or limited the cuts, meaning not all customers saw the same relief.
As inflation continues its monthly trend upwards and the RBA maintains a cautious stance, don’t assume immediate flow-on benefits from rate decisions in the coming year.
Insights and Tips from YBR’s Lending Experts
We turned to YBR Home Loans’ experienced brokers for insights based on what they’re seeing on the ground, talking with future home buyers and mortgage holders every day.
1. Preparation Is Key
Effie Nicol, Branch Principal at YBR Home Loans Earlwood, warns that many eager property buyers arrive underprepared:
“A lot of people haven’t even looked at their budget, so they’re not sure what they can afford.”
Effie offered some straightforward tips:
- Start with a realistic assessment of your budget and borrowing capacity.
- Set clear goals for what you want to achieve and your time frame.
- Gather necessary documents ahead of time, so you’re ready to secure pre-approval and move quickly when opportunities arise.
2. Borrowing Capacity Remains a Hurdle
Despite rate cuts, borrowing capacity hasn’t improved enough for many first home buyers. Effie has observed:
“The property might be selling for $800,000, but the borrower can only get approval for $520,000. That’s a significant gap.”
3. Lender Scrutiny on Spending Habits
Mel Falanga, Branch Principal of YBR Home Loans Leppington, reminds borrowers that lenders review your spending habits closely:
“Personal loans, credit card debt, or frequent gambling transactions can weaken your application.”
Mel pointed out that lenders typically want to see three months of “good behaviour” on your transaction history, so review your statements and make positive changes before applying for a loan.
The good news? A few months of changing some essential financial habits can make a big difference.
4. Inconsistent Lender Policies
Tom Haggie, Branch Principal at YBR North Sydney, points out that lender policies can vary widely:
“There’s a difference between what you can technically borrow and what you can comfortably afford.”
Tom’s tips are to work with a mortgage broker who understands not just the numbers, but your lifestyle and future goals, so your loan supports your wider circumstances.
Looking Ahead: What to Expect in 2026
With inflation running hotter than expected, the RBA has signalled continued caution. If inflation doesn’t ease back, a rise in the cash rate is possible as early as February.
Borrowers considering a purchase, refinance, or loan restructure in early 2026 should:
- Check borrowing capacity sooner rather than later (don’t leave it until after the holidays)
- Review your transaction history and tidy up any red flags
- Seek personalised guidance from an expert mortgage broker
At Yellow Brick Road, we’re here to help you navigate every change, so you can make informed decisions and get the home loan solution that’s right for you, whatever the RBA decides next.
If you’re ready to review your options or have questions about your current mortgage, reach out to your local YBR Home Loans broker today.
