Rate Cuts, Government Moves, and What Happens Next
Interest rates are expected to fall again in November, marking the fourth cut in this cycle. At the same time, the federal government has brought forward major changes to the Home Guarantee Scheme (HGS), now starting 1 October. The updates remove income caps, lift property price thresholds, and open the scheme to an unlimited number of buyers. We’re already seeing prices edge up in NSW and Victoria, and with more buyer demand expected, pressure is likely to build. In NSW, the state government has announced plans to boost housing and improve transport links in key areas of Sydney, though these projects will take time to deliver. Servicing challenges remain, but when you combine lower variable and fixed rates, expanded government incentives, and tight supply, one thing becomes clear: property prices are likely to rise.
Lower variable rates and is fixed back on the table?
The next Reserve Bank of Australia (RBA) meeting is in late September, but most economists agree we’ll likely need to wait until the first Tuesday in November to see any move. While variable rates are drifting lower, some lenders are also making aggressive moves on fixed rates. Banks like Suncorp, Macquarie, St. George and Westpac are offering fixed rates starting with a 4 - a number we haven’t seen in a while.
It raises a valid question: Is it time to fix?
Fixed rates come with trade-offs, as we know. Most of them you cannot offset; there are early exit fees, and less flexibility. But they also offer certainty in a changing market.
If you believe the RBA will deliver 2 to 3 more rate cuts over the next 12–18 months, then locking in might not make sense just yet. But for some borrowers, especially those wanting stable repayments, a split loan (part fixed, part variable) could be worth considering.
Game changer: Home Guarantee Scheme expansion brought forward
The federal government has fast-tracked changes to the Home Guarantee Scheme (HGS), now starting 1 October 2025, not January as originally planned.
These changes are major and include:
- Unlimited spots: no more application caps
- No income limits: earn as much as you like
- Higher price caps: (see table below)
- Only 5 per cent deposit required, with no lenders' mortgage insurance (LMI) and access to cheaper sub 80 per cent loan to valuation (LVR) rates, meaning first home owners are able to access the same rates as those who had saved a 20 per cent deposit.
Source Housing Australia
This will significantly widen access for first home buyers but with no matching changes to supply, demand is expected to surge, and prices likely will too.
We've seen this before and what happened then?
Looking back:
- In 2009, the First Home Owner Boost ($14k) drove demand
- In 2020, the First Home Loan Deposit Scheme did similarly
Both initiatives gave buyers more confidence, and with little added supply, prices rose.
It’s the same setup again now. And we’re already falling short of construction targets, with delays, trade shortages, and rising build costs all slowing delivery.
That puts upward pressure on prices, especially in the first home buyer segment.
NSW infrastructure plans aim to unlock more housing
To combat undersupply, the NSW Government is pushing new development around major transport corridors.
Key initiatives include:
- Woollahra: 10,000 new apartments planned around a future train station (reviving an abandoned station)
- Burwood: Up to 15,000 additional dwellings
- Bays West (Balmain): Housing growth linked to the new Metro station
These projects are a step in the right direction, combining transport with housing to support growing demand. But they’ll take time. Suburbs with strong population growth and existing infrastructure are already seeing price momentum return. Data released this week by Cotality (former RP Data/Corelogic) will likely substantiate this trajectory.
August highlights from the Black and White Finance team
🌧 City2Surf: The team pushed through pouring rain to complete the race and raise funds for White Ribbon Australia, helping end violence against women.
🏆 Best in Australia - Finalists: We’ve been nominated at the Australian Mortgage Awards for Best Customer Service from an Individual Office, a nod to the care and effort we bring every day. We truly appreciate this recognition and are proud to be recognised as one of the best in this country. A massive pat on the back to our team for their commitment to providing an 11 out of 10 experience over all these years.
🐾 New Mascot: Next month, you'll be able to meet our newest (and cutest) team member!
Final thoughts
Interest rates are heading south, government support for buyers is expanding faster than expected, and fixed rates are becoming part of the conversation again. But while serviceability is improving (on paper), supply remains tight and that imbalance is already pushing prices higher in many areas, especially at the entry level. The changes to the Home Guarantee Scheme will open the door for more buyers, but without more homes to meet that demand, competition is likely to intensify. We’ve seen this pattern before.
Whether you are planning your next move, reviewing your loan, or just trying to stay one step ahead, feel free to reach out.
If you want to know more about different rates, terms, or bank specials currently available, please send a note to info@blackandwhitefinance.com.au, or click the start today button a little lower.
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