Three out of four experts predict RBA rate cut next Tuesday

The likelihood of imminent relief for Australians with a mortgage is growing, with more and more experts supporting the odds of an interest rate cut by the Reserve Bank of Australia next week.

The RBA's first meeting of the year will take place next Monday and Tuesday, with a decision on interest rates to be made public on Tuesday afternoon AEDT.

Now, a Finder survey of 37 economics experts has found that almost three-quarters of them (73 per cent) expect the meeting to end with a rate cut.

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A cut of 25 basis points would bring the cash rate back to 4.1 per cent.

Finder head of consumer research Graham Cooke said a rate cut would help thousands of borrowers who had been doing it tough for years.

"Headline inflation is within the target range, and has been for a while. With trimmed mean inflation falling also, this has heaped pressure on the BRA to cut," Cooke said.

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"While most experts are confident the cash rate will finally be slashed, it's not a done deal."

Adjunct Professor Noel Whittaker from the Queensland University of Technology is one of the naysayers.

He said the reality is the RBA would rather wait another month than risk moving too soon.

"The problem is inflation in the building industry remains massive, labour shortages are severe, and the job market is still strong – keeping inflationary pressure on the economy," he said.

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"Right now, I don't see how a rate cut can be justified, even though I have enormous sympathy for mortgage holders doing it tough.

"It's a sad system when they bear the brunt of the fight against inflation."

AMP's Shane Oliver is one of the majority expecting a cut.

"Underlying inflation is falling faster than the RBA expected and has been running around target over the last six months, economic activity is a bit weaker than expected and Trump's trade war poses more risks to Australian growth than inflation," Oliver said.

Cooke said regardless of when the first rate cut arrives, homeowners should use this time to review their mortgage carefully.

"If you're not getting the most competitive rate, why stick with your current lender?" he said.

"You can also call your bank to see if they'll offer you a better deal. If they can't help, it might be time to go home loan shopping."

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The suburbs where house prices have doubled in less than four years

How much the average homeowner could save

Aussies with the average home loan of $641,416 will save over $100 a month, if the RBA cuts the cash rate by 25 basis points next week, and that rate cut is passed on in full by the lender.

They will see their mortgage payments drop from $3887 per month to $3784 (a saving of $103).

Those who just purchased a home will save even more. Buyers of Sydney's average home of $1,132,565 with 80 per cent loan to value ratio (LVR) would save $145 monthly, or $1740 annually.

Buyers of Perth's average home of $724,679 with 80 per cent LVR would save $93 monthly, or $1116 per year.

More than a third (38 per cent) of homeowners said they struggled to pay their mortgage in January, according to data from Finder's Consumer Sentiment Tracker.

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