Mortgage holders' hopes for early Christmas present all but quashed, say experts

Friday, 5 December 2025 08:42

The Reserve Bank is hotly tipped to be the Grinch that stole Christmas next week when it holds its final cash rate meeting of the year.

Mortgage holders hoping for a Christmas miracle will be left disappointed next week when the Reserve Bank of Australia (RBA) hands down its decision on interest rates, according to new research.

The unanimous verdict of 35 financial experts in a survey by financial comparison site Finder was the RBA will keep the cash rate at 3.6 per cent next Tuesday.

While 33 of them backed the central bank's expected no change policy to rates, two believed they should be lifted.

Fewer Aussies are getting mortgages as interest rates continue to rise, new figures show.

Finder head of consumer research Graham Cooke says the clear message for mortgage holders is don't expect any relief soon.

"A hold is still a better outcome than an end-of-year hike, which was being suggested by some analysts – and would have added extra pressure to already stretched household budgets," he said.

"With inflation starting to get away from the RBA, the board appears committed to steady rates for now.

"Any festive rate cuts are firmly off the table, and borrowers will need to prepare for a cautious start to 2026 rather than a sudden reprieve."

The final nail in the coffin for hopes of a cut came last month when data from the Australian Bureau of Statistics showed the country's annual inflation rate rose to 3.8 per cent in the 12 months to October.

The trimmed mean – the Reserve Bank of Australia's preferred measure of underlying inflation – also rose, up from 3.2 to 3.3 per cent.

Maintaining interest rates at their current level will also impact pre-Christmas spending, according to Finder.

Research shows one in three mortgage holders would have enjoyed a more indulgent Christmas with a lower cash rate.

From those surveyed, 55 per cent had even been planning how they'd spend extra cash if rates continued to fall by splashing out on travel, home renovations and shopping for clothes and shoes.

The outlook for potential rates cuts next year remains a mixed picture.

Half of the 28 experts surveyed believe Australia has hit the bottom of the easing cycle, while the other half say there's still room for rates to fall.

Many highlighted one lingering factor: the stubborn level of inflation will loom large over the RBA's cash rate strategy over next year.

More than a third of experts say October's inflation data has "definitely" raised the likelihood of a rate hike within the next six months, while 34 per cent believe it will have little impact.

Sign up here to receive our daily newsletters and breaking news alerts, sent straight to your inbox.