Yesterday, the Reserve Bank of Australia increased the cash rate by 0.25 percentage points, taking it to 4.60%, the highest it's been in 15 years!
We know this probably wasn’t the news you were hoping for.
When groceries, bills and everyday life already take up so much of the household budget, another rate rise can feel like one more thing to worry about.
If you’re wondering, ‘What does this mean for my repayments?’ or ‘How much more can our budget stretch?’ , we hear you.
You don’t have to work through those questions on your own. That’s what we’re here for.
Will my home loan repayments change straight away?
Not automatically. The RBA sets the cash rate, which influences home loan interest rates, but it isn’t the rate you pay on your mortgage.
If you have a variable-rate loan, your lender will confirm whether it’s changing your interest rate, when that change takes effect and what it means for your repayments.
If you have a fixed-rate loan, the rate on your fixed portion generally stays the same until your fixed term ends. If that date is coming up, now is a good time to chat about what happens next.
Why has the RBA increased the cash rate?
The short answer is inflation, the rising cost of goods and services.
The RBA says inflation remains too high, with higher global energy prices and ongoing pressures in the Australian economy contributing to its decision. The increase is intended to help bring inflation back under control.
We know that explanation doesn’t make paying the mortgage any easier. For most households, the biggest question is simply: 'What does this mean for us?'
This is what you can do now.
You don’t need to make a big decision based on a headline. A good starting point is a check-in:
Check your lender’s update: What will your rate and repayment be and when will any changes start?
Revisit your budget: Work out how a higher repayment could fit alongside your everyday expenses.
Check your loan setup: If you have an offset account, is it linked correctly and working as expected?
Ask for a review: We can look at your rate, fees and loan structure and whether they still suit your circumstances.
Sometimes we can ask your existing lender for a better rate. Sometimes it’s worth comparing other options. Any potential savings need to be weighed against the costs of making a change.
A review is a conversation, you don’t have to arrive knowing the answer.
If repayments are becoming difficult, please reach out.
You don’t need to wait until you’ve missed a repayment to ask for help.
We’ll talk through your concerns, look at your numbers and help you understand your next steps.
