Why a rate hold can actually help first-time buyers get ahead.

On 8 July 2025, the Reserve Bank of Australia (RBA) surprised markets by holding the cash rate steady at 3.85%, despite widespread expectations of a 25 basis point cut. This decision, while disappointing for current homeowners seeking relief from high mortgage repayments, presents a silver lining for first home buyers.

Why the RBA held rates

The RBA's decision was influenced by a cautious approach to ensure inflation remains within the target range. This conservative stance aims to balance economic growth with price stability.

What this means for first home buyers

While existing homeowners may feel the pinch, first home buyers can find opportunities in this environment:

1. Stabilising property prices

Holding rates may temper rapid property price increases, allowing first-time buyers more time to enter the market without facing escalating prices.

2. Government support schemes

Programs like the First Home Guarantee Scheme enable eligible buyers to purchase a home with as little as a 5% deposit, without paying Lenders Mortgage Insurance (LMI). This reduces the upfront financial burden and accelerates the path to homeownership.

3. Time to strategise

With rates on hold, prospective buyers have a window to assess their finances, seek pre-approval, and engage with professionals to develop a tailored buying strategy.

Looking ahead

Economists anticipate potential rate cuts in the coming months, contingent on inflation data. A gradual easing of rates could further improve borrowing conditions for first home buyers.

Ready to sake the next step?

Navigating the property market can be complex, but you don't have to do it alone. We specialise in guiding first home buyers through every step of the journey.

Book a call to discuss your goals and explore how we can assist you in achieving homeownership.

Disclaimer: General information only. This article does not take into account your objectives, financial situation or needs. Consider whether it’s appropriate for you and seek advice for your circumstances.