However, uncertainty persists regarding the timing of such relief, according to Sally Tindall, Insights Director at Canstar.

Speaking with 3AW Radio, Tindall shared her insights on what borrowers can expect in the coming year.

"Borrowers across the country are hanging out for rate relief, particularly those borrowers who haven't been able to refinance or renegotiate their interest rate," Tindall said.

"They've had to just sit back and cop all thirteen RBA rate rises on their variable mortgage, four of which were doubles."

Tindall noted a "very high possibility" of at least one RBA rate cut in 2025 but emphasised the unpredictability of the central bank's decisions.

"The big question is, are they coming in 2025 and if so, when? I think the answer to the first half of the question is yes, but there's no guarantee because the RBA repeatedly says it's data-dependent, and the data sometimes does not behave."

"The CBA economic team is still expecting a cut as early as February. That's the first meeting back from the summer break. I think that's probably a stretch too far. I can't see a world where the RBA board comes back and makes it their first point of business, particularly because of inflation. You know, inflation is actually well in the target band of two to 3% but that's been artificially temporarily lowered by the government's electricity bill relief."

Timing of rate cuts remains speculative

Citing analysis from CBA's economic team, Tindall suggested February as a potential start for rate cuts but expressed skepticism.

"That's the first meeting back from the summer break. I think that's probably a stretch too far," she said.

"I can't see a world where the RBA board comes back and makes it their first point of business, particularly because of inflation."

Inflation remains a sticking point, with trimmed mean inflation still at 3.5%, above the RBA's target band of 2-3%.

Unemployment, currently at 3.9%, also supports the RBA's "wait and see" approach.

"So, I do think that it's going to be a couple more months, at least, till we see that first rate cut. It could be the second half of 2025 - you never know," Tindall added.

Homeowners still feeling the pinch

The uneven impact of rate changes was another point of focus for Tindall.

"The problem is that the cash rate lever really hits homeowners, people with a mortgage, incredibly hard. It also hits renters incredibly hard, but it misses out on the segment of the community that is fortunate enough to own their own home outright," she said.

Tindall called for more targeted measures from the government to address inflation without disproportionately impacting specific groups.

She advised homeowners not to rely on rate cuts too soon.

"If you've got a mortgage, do not bank on a rate cut until it hits your bank account. We might get something coming out of left field that means we need higher rates for longer," she warned.

"My advice is, if you need rate relief and if you want to go and let the purse strings loose at the Boxing Day sales, go and find savings in your budget yourself. Do not wait for the RBA to deliver you a rate cut on a silver platter when you can do that by refinancing your mortgage."

Tindall highlighted the disparity between rates offered to new and existing customers, urging borrowers to take proactive steps to secure better deals.

"The average owner-occupier who hasn't renegotiated their home loan since the start of the hikes is at an estimated rate of 7.11%, yet the RBA data shows the average is actually 6.33%," she explained.

"This means many borrowers have fought their way out of higher rates by complaining to their bank or switching lenders."

For those awaiting relief, Tindall advised action over patience.

"You can get rate relief today by refinancing your mortgage or haggling with your lender," she said.

"And when RBA rate cuts do materialise, you'll be in an even better position to take advantage."

With 2025 underway, borrowers and analysts alike will be closely watching the RBA's moves, hoping for long-awaited respite from the era of rate hikes.

(Source: view.com.au Emily Rayner, Editor – View 2 January 2025)