The Reserve Bank of Australia (RBA) has increased the cash rate by 25 basis points to 4.35%, marking another move in response to ongoing inflation pressures.
For homeowners and buyers, this decision has real implications—but the impact will differ depending on your situation.
What’s changing?
If you’re on a variable rate, your lender is likely to pass on some or all of this increase, meaning your repayments could go up. Even small rate movements can add noticeable pressure to monthly budgets over time.
If you’re on a fixed rate, your repayments won’t change immediately. However, if your fixed period is ending soon, you may face a higher rate when you roll onto a new loan.
What about borrowing power?
Higher interest rates typically reduce borrowing capacity. This means buyers may find their maximum loan amount has decreased—something to keep in mind if you’re planning to enter the property market or upgrade.
Why did the RBA raise rates?
The RBA has flagged ongoing inflation concerns, driven by rising fuel costs, global uncertainty, and strong demand in parts of the economy. The Bank expects inflation to remain elevated for some time, which may influence future rate decisions.
What should you do now?
This is a good time to:
- Review your current loan and repayments
- Consider whether your rate is still competitive
- Explore refinancing or restructuring options
- Plan ahead if your fixed rate is expiring
While rising rates can feel challenging, they also create opportunities to reassess and optimise your home loan. Speaking with a mortgage broker can help clarify your options and ensure your loan remains aligned with your goals.