One of Australia’s biggest banks has told clients when they can really expect interest rates to fall. Picture: NewsWire / Nikki Short

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One of Australia’s biggest banks has told clients when they can really expect interest rates to fall.

On Thursday in note to clients, Westpac chief economist Luci Ellis delivered the sobering news.

The RBA cash rate has sat at 4.35 per cent for a year now, after the Reserve Bank declined to give Aussies an early Christmas present at their last meeting earlier this month.

There were widespread predictions at the start of the year, that an interest rate fall would be granted by the central bank to struggling Aussies sometime during 2024.

But despite widespread pleas to cut interest rates, it now appears rate will remain untouched throughout 2024.

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Westpac says a rate cut won’t be coming until May 2025. (Photo by Lisa Maree Williams/Getty Images)

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It’s a long way from 0.1 and 0.25 rate that Australians enjoyed in 2020.

And now Westpac is predicting Australians might have to wait for well into the new year for mortgage relief.

“An earlier start in February or March is still possible, but it is no longer more likely than a May start date,” Ellis.

She said she believed the RBA would continue to be conservative in its rates assessments after reviewing recent communications from the RBA and also due to Australia’s continued strong jobs market.

Ellis said she believed that went rates cuts do come, mortgage holders could be pleasantly surprised by a series of cuts.

The longer the RBA board waits, the faster they will need to move thereafter, as it would then be more likely that they have hesitated too long,” Ellis wrote.

Westpac has now joined NAB and Citi as predicting Aussies will have to wait until May 2025 for a rate cut.

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Plenty of Aussies are struggling with higher mortgage rates.

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A NAB Group Economics statement said “there are only two more employment prints and one quarterly CPI before the February 18 meeting. Given the data flow to date, it now looks unlikely the RBA will have enough confidence in the trajectory of inflation by then. There is a real risk that policy rates stay on hold even deeper into 2025.”

“For Australia, the cutting phase will be later and ultimately shallower.”

The NAB statement said after a cut in May it expected “to see a steady profile of one cut per quarter back to 3.10pc by mid 2026”.

However, the good news for mortgage holders is that NAB has jumped the gun on rates cuts with an out-of-cycle double rate cut, slashing its variable home loan rate in what could trigger a flurry of early Xmas presents for homeowners and buyers.

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NAB have made an out of cycle rate cut. (Photo by Lisa Maree Williams/Getty Images)

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NAB’s basic variable rate for home loans was cut by 40 basis points to 6.44 per cent, with the out-of-cycle slash potentially saving new customers on a $500k loan around $126 in monthly repayments.

It comes as experts expect fierce competition between banks and financiers using digital-only offers – with two of the big four banks already moving that way – CommBank and ANZ Plus.