RBA Holds Rates Steady: What That Means for Your Novated Lease
The RBA kept rates at 4.35% in June 2025. Here's what a steady rate environment actually means for Australian employees considering a novated lease.
The Reserve Bank's Monetary Policy Board held the cash rate at 4.35% at its June 2025 meeting, according to the Treasury Ministers media release. The government described it as a "welcome reprieve" for mortgage holders — and while a novated lease isn't a home loan, the rate environment affects the finance component of every lease deal in Australia.
For anyone sitting on the fence about a novated lease, a stable rate gives you a cleaner picture of your repayment costs than you'd get in a rising-rate cycle. That's not a guarantee of savings — it just means one major variable isn't actively moving against you right now.
What this means for novated lease customers
Novated leases are funded by financiers who price their rates partly off the broader interest rate environment. When the RBA holds, those financiers aren't under fresh pressure to reprice upward. That gives lessees — and brokers — a more stable environment to lock in terms.
The government's budget context is also relevant here. The same Treasury release references tax cuts, cheaper medicines, and cost-of-living measures already in motion. For PAYG employees, a novated lease sits on top of those measures — the pre-tax treatment of lease payments and running costs is unchanged, and for eligible electric vehicles the FBT exemption still applies under current legislation. If you're weighing up whether now is the right time, a rate hold removes one reason to wait.
Common questions
Does the RBA cash rate directly set my novated lease interest rate?
Not directly. Financiers set their own rates, but they're influenced by the cash rate and wholesale funding costs. A hold means those inputs aren't under fresh upward pressure — though your actual rate depends on the lender, lease term, and vehicle.
Does the rate hold affect the EV FBT exemption?
No. The FBT exemption for eligible zero and low-emissions vehicles is a separate legislative matter and is not affected by RBA decisions. It remains in place for qualifying vehicles under current law.
Should I rush into a novated lease because rates are steady?
A stable rate environment is one factor, not the whole picture. Whether a novated lease makes sense for you depends on your income, employer, how much you drive, and the vehicle you want. Use it as context, not as a deadline.
Is my novated lease repayment fixed regardless of what the RBA does?
Most novated leases use a fixed interest rate locked in at signing, so your repayments don't automatically move when the RBA changes the cash rate mid-lease. Confirm the rate type with your broker before signing.
What is millarX's role here — are you a lender?
No. millarX is an ACL-licensed novated lease broker (ACL 569484), not a lender. We arrange leases through accredited financiers including Pepper, and we're AFCA-registered. Customer funds are held in segregated accounts.