RBA July 2025 rate decision: will interest rates rise, fall or hold?

After The Reserve Bank of Australia (RBA) delivered its second rate bringing the official cash rate to 3.85%, borrowers will be hoping for another rate cut next week, when the RBA have their next meeting. But, what are the experts forecasting?

Expert predictions: will rates be on hold, go up or go down?

We’ve pulled together expert predictions from Australia's big four banks:

• ANZ expects two cuts this year around August and later, taking the cash rate to approximately 3.35%.
• NAB forecasts a cut in July, followed by additional reductions in August and November, targeting a terminal rate of 3.10%.
• Commonwealth Bank (CBA) sees two cuts in August and September, bringing the rate to 3.35% (but notes July could happen if data weakens unexpectedly).
• Westpac expects the RBA to hold in July, then deliver cuts in August and November, with the cash rate easing to 3.35% by year-end, and further cuts into early 2026. Westpac emphasises the RBA’s preference for “cautious and predictable” moves.

What's guiding the experts' thinking?

1. Inflation is within target - headline CPI is around 2.9%, with trimmed‑mean inflation near 2.6%, comfortably within the RBA’s 2-3% target range.
2. Economic growth remains weak - GDP grew just 0.2% in Q1 2025 (1.3% year-on-year), while household spending stalled and savings increased (savings ratio ~5.2%). 
3. Global risks persist - The RBA weighed a 50 bp cut in May due to global trade tensions but opted for 25 bp to stay predictable. 
4. Policy remains tight - With neutral rate estimates around 2.75-2.9%, the current 3.85% cash rate is still restrictive, suggesting scope for further easing.

What could shift to alter these predictions?

• A sudden increase in wage or energy inflation could prompt the RBA to hold. 
• Stronger employment data might delay cuts. 
• A global economic or geopolitical shock could accelerate rate reductions.

What a rate cut could mean for borrowers?

If a cut is delivered, the cash rate should fall to 3.60% which could save you thousands on your loan repayments annually. If the RBA cuts rates in July, there’s no guarantee your bank will pass it on and if you’re on a fixed-term deal, any change might be months away from affecting your repayments. However if you're a homeowner or looking to buy, it will be natural to be wondering: Should I refinance? Fix my rate? Sit tight?

Here’s our take at Loan Market Elevate:

• Now’s the time to check in on your home loan—especially if you haven’t reviewed your rate in the past 6–12 months.
• Fixed-rate loans are starting to offer some value again, depending on your goals and how long you plan to hold the property.
• If you're on a variable rate, it’s worth reviewing your options and negotiating with your lender (or better yet, let us do it for you).
• Planning to buy? Getting pre-approval and understanding your borrowing power is a smart move in today’s climate.

We have some really helpful free online calculators to quickly calculate your borrowing power and see how much you could save on your mortgage and more. Click here for more details.

Contact our team for a review of your existing loan or to find out your borrowing power and get pre-approval for your first loan. Call 02 8850 9040 or send us your enquiry online.

Sources:  rba.gov.au , westpaciq.com.au, business.nab.com.au, forexlive.com, brokernews.com.au, reuters.com, thenightly.com.au, news.nab.com.au, brokernews.com.au