The monetary policy board noted the considerable drop in inflation from its 2022 peak, yet warned that headline inflation may approach the top of the range next year as “temporary factors,” such as energy bill rebates, expire.

Nevertheless, it assessed that “risks to inflation have become more balanced” and opted to lower rates since inflation is anticipated to hover around the target range.

How much will the rate cut save mortgage holders?

For mortgage holders, this means potential monthly savings of $91 for a $600,000 loan, $114 for a $750,000 loan, and around $152 for those with a $1 million loan.

Which banks are passing on the latest interest rate cut?

Online lenders Athena and Unloan have also passed on the cut immediately.

How far could interest rates fall?

Unlike the other big four banks, NAB had predicted a 0.50 per cent cut in May — a move that ultimately didn’t eventuate. It has yet to update its forecasts.

When will the RBA make its next interest rates decision?