Suite of new changes could provide cost of living relief in 2025

Australians struggling with the rising cost of living could be given some relief in the new year, according to a suite of new predicted changes.

Canstar has predicted changes to rate cuts, inflation and support payments that could give Aussies some much-needed relief.

While it remains unclear whether the RBA will cut rates, Commonwealth Bank of Australia (CBA), Westpac, NAB and ANZ are expected to cut cash rates between February and May.

CBA is anticipated to have the highest number of cuts (four) with a $358 drop in monthly repayments by the end of 2025 for a loan of $600,000.

Westpac is also slated to have four cuts with a $357 drop in monthly repayments by the end of 2025.

However Canstar data insights director Sally Tindall urged Aussies with a mortgage not to “hope for the best” as there’s “no iron-clad guarantee” of any RBA cuts next year.

“If you have a mortgage, don’t just cross your fingers and hope for the best,” Ms Tindall said.

“Get on the front foot over summer by knocking down your interest rate as far as possible, either by haggling or refinancing.

“That way, when RBA cuts do finally come you can have your cake and eat it too.”

Support payments, including Youth Allowance and Austudy, are slated to get a boost of $30.60 per fortnight.

“The annual indexation of key support payments will be welcome relief for anyone living off these funds,” Ms Tindall said.

“While for many households, this extra money won’t come close to bridging the budget black hole, it will play a small part in helping these families pay for everyday essentials.”

The government’s Help to Buy program could also give lower-income first-home buyers a shot at the “property ladder”.

Labor passed the bill in November, which would allow up to 40,000 home buyers to get into the property market with a lower upfront deposit and mortgage repayments.

While states and territories would need to pass their own legislation before the scheme commences, the policy would allow up to 40,000 first-home buyers within four years to buy a home, with the Commonwealth stumping up 40 per cent of the purchase price for new homes and 30 per cent for existing homes.

Buyers must buy the home as owner-occupiers, and have a yearly income of less than $90,000 for individuals or $120,000 for couples.

Each state will also have individual price caps across metro and regional areas, and rural zones, which will range between $450,000 to $950,000 for homes in Sydney and its regional areas.

“While it does nothing to put a lid on property prices, which is typically the biggest hurdle for first-home buyers, it gives low- and middle-income Australians the ability to own at least part of their own home while limiting the amount of debt they take on,” Ms Tindall said.

Her final piece of advice was to take time in the new year to set up both a budget and financial goals for the next 12 months.

“Having a strategy for your finances will give you a clear idea of what you want to achieve in 2025 and a better understanding of the steps you’ll need to take to get there,” Ms Tindall said.