Should You Wait for a Rate Cut Before Buying a Home in Australia?

Should you wait for interest rates to drop before buying property?

In this episode of The Mortgage Chat, I’m breaking down a question many Aussies are asking right now—“Should I wait for a rate cut before buying my first home or investing in property?”

I’m Tony Xia, the Founder and Director of The Mortgage Agency—one of Sydney’s top mortgage broker firms.

With rising interest rates and the RBA’s next moves still uncertain, it’s important to know what waiting might really cost you. 

I’ll walk you through how to think about property buying during this high-rate period, when it makes sense to act, and when it’s okay to hold off.

In this video, you'll learn:

👉  The reality behind rate cuts and property prices
👉  Why waiting can backfire for first home buyers
👉  How much interest rates would need to drop to make a difference
👉  A smart way to structure your loan while rates are still high

Want expert advice tailored to your situation?

Get in touch with us at The Mortgage Agency for a free consultation with one of our experienced mortgage brokers.

We’ll help you secure a great loan—whether you’re buying now or later.

Don’t forget to like, comment, and subscribe to The Mortgage Chat for more expert tips on navigating property, mortgages, and finance in Australia.

YouTube Chapters:
0:00 Introduction
0:15 Should you wait for a rate cut?
0:45 How rate cuts affect property prices
1:30 Example: waiting vs buying now
2:05 If rates drop, will you even feel the difference?
2:40 What if the market gets more competitive?
3:15 Real story of a buyer who waited too long
3:55 How to make a smart decision now
4:20 Structuring your loan for flexibility
4:50 Final thoughts

📞 Need personalised help? Contact The Mortgage Agency today for a free chat with our expert brokers. We’ll help you plan smarter and stay ahead in the Aussie property game.

👉 Like, share, and subscribe to The Mortgage Chat for more simple breakdowns of finance, mortgages, and property strategies!

🎧 LISTEN TO THE PODCAST

Spotify: https://open.spotify.com/show/1jjFKsmhZaPYg25QPW9y17
Google Podcast: https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5idXp6c3Byb3V0LmNvbS8yMTk1NzEzLnJzcw==
YouTube: https://www.youtube.com/@themortgageagency 

📍 FIND US HERE

LinkedIn: https://www.linkedin.com/in/tony-xia-12a7b596 
Facebook: https://www.facebook.com/The-Mortgage-Agency-103274301374511 
Instagram: https://www.instagram.com/tonyxia_themortgageagency/ 
YouTube: https://www.youtube.com/@themortgageagency8841/videos

Book a quick call⬇️

https://themortgageagency.com.au/contact/

Tony Xia | The Mortgage Agency
📞 0423 718 612
📩 Tony@themortgageagency.com.au


rate cut Australia, wait for interest rate cut, buying property in 2025, mortgage strategy Australia, home loan tips, should I wait to buy property, RBA interest rates 2025, buying vs waiting property Australia, mortgage broker Sydney, The Mortgage Chat

Transcript

0:00

SO WHY WAITING FOR A RATE CUT CAN CAUSE YOU MORE HARM THAN DO YOU ANY GOOD TODAY I'M GONNA BREAK IT DOWN WHY YOUR FIRST TIME BUYERS SHOULD NEVER WAIT FOR A RATE CUT BEFORE JUMPING INTO THE MARKET THE FLOW ON EFFECTS ON THESE RATE CUTS NORMALLY TAKE AROUND THREE TO SIX MONTHS FOR THE RATE CUTS TO ACTUALLY TAKE INTO EFFECT IN THE ECONOMY WE HAD THAT RATE CUT THIS YEAR IN FEBRUARY AND WE HAD THE RATE CUT IN MAY THEREFORE WE PROBABLY GONNA SEE MORE INCREASES IN PROPERTY PRICES IN THE COMING FUTURE so why waiting for a rate cut can cause you more harm than do you any good today I'm gonna break it down why your first time buyers should never wait for a rate cut before jumping into the market the flow on effects on these rate cuts normally take around 3 to 6 months for the rate cuts to actually take into effect in the economy we had that rate cut this year in February and we had the rate cut in may therefore we probably gonna see more increases in property prices in the coming future so why waiting for a rate cut can cause you more harm than do you any good I'm your host Tony Xia and thanks for joining me on another episode of the Mortgage Chat today I'm gonna break it down why your first time buyers should never wait for a rate cut before jumping into the market now this logic can be applied for first time buyers first time investors I'm gonna break down on what has happened to the property market since the February rate cut and what this rate cut has done to the property market and how has affected you first time buyers first time investors or you heavy investors out there for everyone that has home loans or investment loans out there already yes a rate cut will relieve some pressure on repayments but what damages actually happens to your first time investors or first time buyers out there and let's break it down so if you don't already know the last quarter Australian median house prices has increased by 0.5% where the median house price now sits at just above $1 million since the last three months after the February rate cut property prices have actually increased by 0.7% all around Australia as an average that's an increase of around $7,000 the last three months and to be honest with you we're probably gonna see more house price growth from now to the next few months because the flow on effects on these rate cuts normally take around three to six months for the rate cuts to actually take into effect in the economy we had that rate cut this year in February and we had the rate cut in may therefore we probably gonna see more increases in property prices in the coming future and today I wanna show you what the rate cuts has caused to the Sydney market and I've using Sydney as an example because I'm from Sydney and why not Sydney is probably one of the most expensive cities in Australia right now with the highest medium price so why not better to use it as an example so let me tell you what has happened to the Sydney property market from May 2025 to June 2025 so remember what I've just told you the flow on effect on the rate cuts doesn't really show until three or six months after the rate cut now there was a rate cut in February right now is in June okay and what has happened to the Sydney property market it actually grew by 0.5% from may till June where the average Sydney house price in May 2025 was around $1.415 million now June 2025 it's actually increased to $1.486 million that's an increase of around $70,000 in just one month and this is all because of the lag from the 0.25% increase and I can just see it already in the coming months the flow on effect from the may rate cuts will take place but I think there was actually a few variables not just the interest rate cuts that's driving up the prices No. 1 I think was the elections now the elections has finalized and labors in the market it's actually increased a lot of consumer confidence especially for home buyers and investors out there we're all waiting for a rate cut everybody was waiting for a rate cut but irrespective if Labour was gonna win or Liberal was gonna win there was gonna be a rate cut it's just a matter of hey who's gonna win so we can get going with these rate cuts cause that's number one No.2 is a first home guarantee there's new policies in place where they're gonna increase the cap on all the states on first home guarantee application for first home buyers and because Labour won it and they were the one that was introducing this new policy I think personally that would have driven up the prices as well and I got a video right here for you to look at now because of the February rate cuts now a lot of consumers out there are believe believing we're at the bottom of the cycle of the rates which is true now obviously these two rate cuts in February and may would have boosted up a lot of confidence back on the market and a lot of consumers believe and would understand that we are at the bottom of the market right now so we're at the peak of the rate cycle right but what a lot of people should have understood is all the media everyone was out there were expecting rate rather than a rate increase so essentially what they should have done was purchase the property before the rate cut announcements doesn't matter if they were gonna rate cut in February March April or may you should have purchased way before that when there was less consumer confidence and less buyers out on the market that allowed you to go into the market a little bit earlier less competition so for a lot of our investors and first time buyers out there they actually started buying property back around November December last year we actually saw a massive influx of applications from December 2024 all the way to now where we probably doing around at least 20 to 25% above what we normally do before December 2024 so I already know that consumers coming back in confidence is increasing but really a lot of these clients should have purchased a long time ago probably last year if you signed a contract to purchase around December last year or even November last year is settled around in February in 2025 you probably purchase the property at the perfect time so for you first time buyers of first time investors out there don't wait for the rate cut because you're just doing yourself a bit of harm you should be going into the market when you're ready instead of waiting for small rate cuts because what rate cuts will do will actually fill up competition it will actually end up costing you more if you're waiting for these rate cuts because a lot of the first home buyers out there or first time investors are waiting for a rate cut because that will boost up the borrowing power but I'll show you in a second why this actually doing you more harm than any good so everybody if you're listening to this podcast only please jump on YouTube and watch this video because that will just breakdown comparing may and April figures right now so everyone what I've done here was I'm gonna show you what was needed in May 2025 in comparison to one month after June 2025 based on the recent increase in prices of 0.5% okay this is for Sydney market by the way remember what I've just told you so remember what I've just said in May 2025 house prices was just a little bit above 1.415 million okay and now it's just a little bit above 1.486 million okay so the difference was around 70 grand increase in just one month but like I said to you it's not just a one month it was continuous from the fib rate card so it would have been gradually banking up in March April in really hit in may in between may and June okay now as you can see here there's a difference right so it's not just it's not just the increase for you first time buyers it's not just the increase it's actually a few things you have to consider number one is deposit okay now I'm assuming here you have 20% deposit plus stamp duty yes I know you may or may not need to use the first time guarantee and all that but that policy hasn't come in place yet so I'm just assuming you need 20% deposit plus stamp duty in this scenario just to make life a little bit easier so guys these figures here I've just rounded them up okay now you'll see deposit wise in May 20% deposit was 283 grand now in June 2025 because of the rate increase of 0.5% just like that you need an extra 14 grand deposit okay now just not deposit 20% is stamp duty as well stamp duty was 60 grand back then now 64 grand bang another $4,000 right there okay so now remember the purchase price could be higher now okay so that means you're gonna need a bigger loan alright so before it was 1 1 3 2 that's the that's the loan you need now cause of this price you need 1 1 8 8 8 8 so just in the space of one month which is continuous from the rate card you need an extra loan of $56,800 okay just because you want to wait for this 0.25% rate card alright so now look at that 14 grand six grand in deposit so 18 grand right there so also $56,800 you need an additional loan right now repayment what I've done here I just use the rate of 5.5% principal and interest over 30 years okay so in may okay if you purchased it back then your loan would have been $6,428 and now if you wanna get the loan right now with a higher price point the loan the repayment is gonna be $6,750 that's a difference of $322 per month now another thing if you're gonna get a bigger loan guess what else you need a bigger income right so the borrowing power I've done here was you're a couple you have no other debts no hex the only debt you have with a 10,000 dollar credit card most people will need a credit card for spending purposes okay and leave the money in the offset account but for this example let's just use a 10 thousand dollar credit card just for the sake of it okay so the income you need as a couple you need 117 thousand dollars each alright so now that your purchase price is higher and you need a bigger loan you need a bigger income you need income of around 120 thousand dollars each that's a three thousand dollar increase each six grand so after tax guess what after tax your after tax income from the increase in salary goes for the extra repayments okay so this is why I'm showing you why a lot of you first time investors out there or first time buyers waiting for a rate cut to get into the market to get your borrowing power increase a little bit is actually the worst thing to do alright here's a breakdown try to get into the market a little bit early if you're ready for it so everyone there you have it waiting for a rate cut actually does actually does more harm than any good and I just showed you how it affected the Sydney market right now just in the space of one month purely because there is a lag of three to six months from every rate cut to really flow on to see the full effect of it okay so like I said to you if you're sitting on the boundaries right now you're waiting for more rate cuts to boost up your borrowing power I've just shown you it's actually doing more harm than any good if I were you right now I will actually at least start preparing yourself and going to the market when you're ready to buy right now don't wait for any more rate cuts cause once you wait for more rate cuts there's more competition that's gonna come back onto the market and the ability for you to get into the market with less competition without paying a higher price starts diminishing so everyone there you have it I got a but before I let you go I got a few more videos that's gonna come out in the next few weeks it's gonna teach a lot of you first time buyers first time investors out there on what to look out for okay but not just that not just for first time buyers and first time investors I'm actually gonna make a video on how for you developers out there or want to be developers where you can potentially get into development without any serviceability needed you heard that right you can actually get a development loan without any income that's needed as long as you meet certain criteria under a commercial development product please stay in tune watch out for this video I got a lot more videos coming in the next few months that will help all you investors first time buyers developers out there as always guys stay in tune and I hope to see you next time