August 2025 Newsletter
Welcome to our August update. This month we have latest updates on interest rates, the property market, the value of an offset account and a welcome to the newest member of the team!
Interest Rate Update
The RBA announced the third-rate reduction for 2025, with a 0.25% drop bringing the cash rate down from 3.85% to 3.60%. All the major lenders have confirmed passing on the rate cut in full over the next fortnight. There is generally a 1–2-month lag on updates to minimum repayments, and each bank has a different process to update these. Get in contact if you had a question about how your banks processes the change.
Estimated monthly repayment savings after the rate cut:
Property Prices
The Melbourne market is starting to trend up. Cotality’s (formally CoreLogic) monthly update shows another month of growth for Melbourne property, with prices up 1.2% in the last three months and 0.5% in the last 12 months. This is showing further positive signs and the impact of the recent interest rate cuts on the property market.
Source: Cotality
Cotality also reported growth in both rents and property sales over the past 12 months. House rents rose 0.7% and unit rents 1.7%, while property sale volumes increased 8% year-on-year, highlighting continued growth and activity in the property market.
Source: Cotality
Value of Making Use of Your Offset Account
I often get asked by clients if having money in their offset account is worthwhile and could they be doing more with it. The main benefits of an offset account when compared to an investment are:
- A guaranteed 6% return (based on have a home loan interest rate of 6%)
- Access to the funds daily
- You will pay off your loan sooner. For example, having $100k in offset with a $500k loan would mean you pay it off in 21 rather than 30 years link
The main benefits from investing money in shares is:
- Potential for larger gains
- Income stream from dividends
- Access to effective tax strategies like CGT concessions
- Diversification
The main downsides of investing money on shares are:
- Volatility
- Income is paid at the top marginal tax rate
So, the safe bet is to keep your $$ in your offset, but if you are willing to take on more risk there may be greater benefits available from investing in shares.
The above advice is generic in nature and doesn’t consider your personal circumstances. For more tailored advice contact your accountant or financial planner.
Team Update
Last month we welcomed Ram to the team! He has worked in mortgage broking for several years and enjoys helping first home buyers get into the market. He likes to spend weekends with family, woodworking or cooking a BBQ.
Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. Information in this article is correct as of the date of publication and is subject to change.