KR Peters Director Peter Nicolls has welcomed the .25 per cent basis point rate cut announced by the Reserve Bank of Australia on Tuesday.

Mr Nicolls says the rate cut, the second this year, is positive news for mortgage holders and especially new home buyers.

All four major banks announced they would pass on the rate cut in full.

The cut takes the official cash rate to 3.85 per cent in a move that was almost universally predicted by economists and banks as inflation eases into the RBA's preferred band of between 2 and 3 per cent, and US president Donald Trump's economic policies create instability and uncertainty around the globe.

"The rate cut will instil confidence in the property market. With the cash rate under 4 per cent for the first time in two years, it will increase buyers' capacity and will provide an average savings of a $100 per month in repayments," Mr Nicolls said referring to borrowers with an average $600,000 mortgage.

He said the cut would drive confidence and activity.

"With inflation seeming to be under control and further interest rate cuts to be announced this year it will stimulate more buyer activity. The drop in interest rates will also alleviate some of the cost of living pressure."

To discuss anything covered in this blog contact the team at KR Peters Officer on 5943 1111 or Wantirna 9800 0000.