Are Interest Rates Going Up Again?

Are Home Loan Interest Rates Going Up Again?

The Quick & Dirty:

Some Australian lenders have already started increasing fixed home loan rates. That doesn't necessarily mean the RBA will increase the cash rate next, because banks can change fixed rates based on their own funding costs and what financial markets expect interest rates to do in the future.

So if you've noticed rates creeping up again, you're not imagining it.

Why are banks putting fixed rates up?

Banks don’t have to wait for the RBA to change the cash rate before changing their home loan rates.

Fixed rates are influenced by what it costs banks to fund their loans and what financial markets expect interest rates to do in the future.

So if markets start expecting interest rates to stay higher or potentially rise fixed home loan rates can start moving before the RBA makes its next decision.

So, is the RBA putting interest rates up again?

Maybe. But nobody knows for certain until the RBA announces its decision.

The cash rate is currently 4.35%, and the RBA's next monetary policy decision is due on 29 September 2026.

Inflation remains a key concern for the RBA, so another increase is possible but banks increasing their fixed rates isn't confirmation that it's going to happen.

What does this mean if you're looking to buy?

This is the bit I'd pay attention to.

Higher home loan rates don't just affect your future repayments.

They can also affect how much a bank is willing to lend you.

Banks assess whether you could afford your mortgage if rates were higher than the rate you're being offered.

APRA currently requires banks to apply a 3 percentage point serviceability buffer when assessing new borrowers.

So if home loan rates rise, your borrowing capacity can potentially fall even if your salary hasn't changed.

We've explained this in more detail in our blog “Why Has My Borrowing Capacity Dropped Even Though My Salary Hasn't Changed?”

Should you wait to buy?

Not necessarily.

Trying to perfectly time interest rates is incredibly difficult.

Instead, if you're thinking about buying in the next few months, I'd want to know:

• What could you comfortably afford now?
• What would your repayments look like if rates increased?
• Would you still have enough left over to enjoy your life?
• Does buying now make sense for your circumstances?

Because there's a big difference between what a bank will lend you and what you want to repay every month.

The bottom line

Yes, some home loan rates are increasing.

Does that guarantee the RBA will put the cash rate up again? No.

But if you're planning to buy, it's worth understanding how another rate increase could affect both your repayments and your borrowing capacity before you start making offers.

If you're not sure what the numbers look like for you, that's where I come in.

At April Six, we'll look at your income, expenses and plans, compare your options and help you understand what feels comfortable for your life.

Book a chat with Eshanee by clicking here

Any information or advice contained on the April Six Pty Ltd website is general in nature only and has been prepared without considering your individual personal objectives, financial situation or requirements. Before acting or relying on this information, you must consider the appropriateness of this information with regard to your individual circumstances and objectives.

April Six Pty Ltd is a Credit Representative of Astute Financial Management Pty Ltd | Australian Credit Licence 364253

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Eshanee Collins is the founder of April Six, a Sydney-based mortgage broker for first home buyers and first-time property investors across Australia.