Listed: How much you’ll save in ever SA suburb and town under a series of interest rate cuts

South Australian homeowners and househunters across South Australia are anxiously awaiting the Reserve Bank of Australia’s upcoming meeting in which it is expected they will cut interest rates in an effort to curb inflation.

Experts are forecasting Australians will be gifted their first rate cut on Tuesday, February 18, with two of the big four banks predict as many as five cuts in this current cycle.

Both Commonwealth Bank and Westpac tip four cuts, the ANZ predicts just two cuts, while NAB has said it expects the RBA to hand down five 0.25 per cent cuts.

Whether the banks pass the rate cut on in full remains to be seen, however if they were to, it would result in a significant saving for South Australian households.

New analysis by REA Group shows were this to happen, the owner of a median priced –$820,000 – home in metropolitan Adelaide would see their monthly repayment of $4020 drop by $110.

SA homeowners are set to save amid a series of proposed interest rate cuts. Picture: Supplied

A second interest rate cut would reduce that amount by $210; a third would bring repayments down by $310 a month, while a fourth would mean SA homeowners were paying $410 less per month.

A fifth 0.25 per cent cut would cut that wipe $510 from that original $4020, bringing monthly repayments down to $3500.

SEE FULL LIST OF SUBURBS BY AVERAGE MORTGAGE SAVINGS

REA Group senior economist Angus Moore said he expected three to four rate cuts by the end of the year.

“The key driver of the rapid increase in interest rates we saw in 2022 and into 2023 and then why they’ve been held at 4.35 since late 2023 really just comes down to inflation: it’s been much higher than the RBA’s target and they’ve been trying to get it under control,” he said.

“That looks like it’s happening now, and that’s why we’re expecting to see some cuts this year.

“All else equal, rate cuts are going to help improve affordability, give borrowers a bit more to spend and support home prices/

“We’re expecting we will see home prices grow this year, but we’re not expecting strong growth.”

REA Group senior economist Angus Moore. Picture: Supplied

Median priced unit owners – those with a metropolitan Adelaide property worth $550,000 – would see their $2710 repayments drop by $70 in the first month, $140 in the second, $210 in the third, $280 in the fourth and $350 if the RBA handed down five consecutive rate cuts the banks passed on in full.

Regional homeowners also stand to benefit, with monthly mortgage repayments on a median-priced house of $460,000 – $2260 – dropping by $60 in the first month, $120 in the second, $180 in the third, $230 in the fourth and $290 in the fifth.

Regional unit owners would save $50 in the first month and $220 after a fifth cut.

REA Group calculated its mortgage repayments based on a 30-year mortgage of a median sale price with a 20 per cent currently paying a mortgage rate equal to the average rate for new mortgages as published by the RBA.

Even Coober Pedy residents are in for a saving. Picture: Supplied

It stands to reason that those with the largest mortgages look set to face the biggest saving in the event of a series of rate cuts, and in SA that’s Hyde Park.

Owners of a median-priced house ($2.95m) here stand to save $380 on their $14,550 on their monthly repayments in the first month, $760 in the second month, $1130 in the third and $1500 in the fourth.

But it’s not just the wealthy that will benefit, with the owners of the state’s most affordable properties – Coober Pedy houses at a $90,000 median – set to save on their $450 monthly repayments.

Here they will drop by $10 in the first month and by $50 after the fourth month.

Canstar data insights director Sally Tindall. Picture: supplied.

Canstar.com.au data insights director, Sally Tindall said the rate cuts would be welcomed by homeowners.

“Australia is a major step closer to the start of cash rate cuts on the back of this latest set of inflation results, after what has been more than two gruelling years of higher rates,” she said.

“When it comes, the first cash rate cut will translate into almost $100 back into the pockets of someone with a $600,000 mortgage – that’s not just a one-off saving, but spare money borrowers can bank month-after-month, with more cuts likely to come.

“Rate cuts will be a weight off the shoulders of borrowers across the country and could potentially put the wind back in the sails of home buyers.”

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