After two years of aggressive rate hikes, the conversation is finally shifting. With inflation easing and economic growth slowing, analysts are forecasting potential rate cuts as early as Q2 2025. But many borrowers are now asking: Should I refinance now or wait until the RBA actually drops rates?

At Simplify Finance, we believe timing the market is less important than understanding your position in it — and acting when the opportunity makes financial sense.

What is Happening in the Market?

While the Reserve Bank of Australia has held the cash rate steady in recent months, banks are beginning to respond pre-emptively:

  • Fixed rates are quietly falling as lenders anticipate softer economic conditions.
  • Discounting is on the rise, with some lenders offering sharp pricing for low-risk borrowers.
  • Cashbacks are rare, but loyalty pricing and refinance deals are back in play.

This means borrowers with clean credit and equity may have a short window of opportunity to lock in sharper rates before competition drives them back up.

Why Refinance Now?

Here are three reasons refinancing now may be a smart move — even before the RBA cuts rates:

  1. Rates Are Already Moving

Banks do not wait for the RBA — they move based on bond markets and funding costs. Many lenders are pricing in expected future rate drops now, which means competitive deals are available today.

  1. Protect Against Rate Stickiness

If your loan is still on a fixed or variable rate set at the peak (above 6%), even a modest reduction to 5.5% can save:

  • $1,812/year on a $500,000 loan
  • $3,624/year on a $1 million loan

That is real money back in your pocket — now.

  1. Unlock Better Loan Features

A refinance is not just about rate — it is a chance to:

  • Consolidate personal or credit card debt
  • Add offset accounts to reduce interest over time
  • Fix part of the loan for certainty while keeping flexibility on the rest

Should You Wait for a Rate Cut?

In theory, yes — waiting could get you a slightly lower rate. But there are risks:

  • Bank policies may tighten further, especially if economic conditions worsen.
  • You may lose negotiating power if your financial situation changes.

In many cases, refinancing now puts you in a stronger position before rates drop — allowing you to fix part of your loan or structure it more strategically.

Case Study: $750,000 Loan

Client A was on a variable rate of 6.14%, paying $4,897/month. After refinancing with Simplify Finance to a lower rate of 5.49%, their new repayment is $4,602/month — saving $3,540/year, or over $88,641 across a 25-year loan. instead of lowering their repayments, the client chose to keep paying $4,897/month. As a result, they are now saving $7,932/year, per year in interest and will pay off their loan significantly faster — cutting down interest by over $174,800 across a 25 years.

What Should You Do Next?

  1. Review your current rate – if it starts with a 6 or above, it may be time to talk.
  2. Check your equity – if your loan is below 80% of the property value, you are in a great position.
  3. Get a pre-assessment – we can check your options across 40+ lenders without impacting your credit score.

👉 Book your strategy session now or contact us to get started.