What is Neutral Cash Rate?
The neutral cash rate is the theoretical cash rate level that neither stimulates nor restrains economic activity. The RBA estimates this around 3.0–3.5% currently. Rates above neutral are contractionary; rates below are expansionary.
Why it matters for you
Neutral cash rate gives you a rough anchor for where rates might settle over the long run — useful when deciding whether to fix, split, or stay variable. If the cash rate is currently above neutral, variable-rate loans may be pricing in future cuts.
Last updated: April 2026