The RBA lifted the cash rate to 4.60% on 29 September 2026, effective 30 September, the fourth rise this year. August inflation came in at 4.0% the next day. For an existing borrower, the next step is to check your lender’s rate, repayments and household budget.
I'd start with the repayments you can manage on today's income. A hoped-for rate cut or a prediction about property prices is a poor substitute for knowing what will be left after the mortgage and the bills.
What the latest rate and inflation figures mean
The September 2026 RBA decision
The RBA raised the cash rate target by 0.25 percentage points to 4.60% on 29 September 2026. The change took effect on 30 September. The cash rate is a benchmark for the financial system; it is not the interest rate on your home loan.
On 30 September, the ABS released the August inflation figures. Annual headline inflation rose to 4.0%, from 3.5% in July. Annual trimmed mean inflation, a measure of underlying price pressure, held at 3.6% for the third consecutive month.
The timing matters: the RBA made its decision before this CPI release. The August figures will inform the outlook from here; they did not cause the previous day's decision.
Leave room for costs outside the mortgage
The ABS reported housing costs up 5.7% over the year to August, with new dwellings and electricity contributing. Automotive fuel prices rose 14.8% in August alone. Fuel and electricity helped explain why headline inflation rose while the trimmed mean was unchanged.
Your budget will not move exactly like the national index. Use your actual groceries, transport, insurance and utility costs when reviewing repayments. If those bills have risen, the amount you can comfortably put towards a mortgage may have changed even if your income has stayed the same.
What first home buyers should check
A rate rise can reduce your borrowing capacity, but there is no reliable rule that every 0.25 percentage-point increase removes $20,000 from everyone's budget. Your income, expenses, debts, loan term and the lender's assessment all affect the result. Have the figures recalculated before relying on an earlier approval.
Buying now or waiting needs a property-level comparison
Cotality’s October Home Value Index reported the following September changes in dwelling values:
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| Market | September 2026 change |
|---|---|
| Australia | Down 1.1% |
| Brisbane | Down 1.5% |
| Regional Queensland | Down 0.9% |
These are broad dwelling-value indices, not a valuation of the home you want. A lower purchase price can help, but higher interest rates can still leave the repayments beyond your budget. Compare both before deciding whether to buy, wait or change the search. Our interest-rate outlook explains the factors affecting future decisions.
Separate your deposit from your repayment budget
On an $800,000 purchase, a 20% deposit is $160,000 and a 5% deposit is $40,000. Buying costs and money to keep after settlement are additional. A smaller deposit generally means a larger loan, so solving the deposit problem does not automatically make the repayments affordable.
Family help is one option
A gift or a family guarantee may help with the deposit or security a lender requires. You still need to qualify for the loan. A guarantee also creates obligations and risk for the guarantor, so everyone involved should understand the documents and obtain independent advice.
Use the extra choice to investigate the home
Cotality reported homes taking longer to sell and more total advertised stock across the combined capitals, giving buyers more choice. That does not mean every seller will accept a discount. Check recent comparable sales, the property's condition and how long it has been listed before making an offer.
Check whether the 5% Deposit Scheme fits
Eligible first home buyers may use the Australian Government 5% Deposit Scheme to buy with a minimum 5% deposit without Lenders Mortgage Insurance (LMI), a premium usually charged when your deposit is under 20%. You must meet the eligibility and property-price requirements, obtain loan approval through a participating lender and meet the ongoing owner-occupier obligations. You remain responsible for the loan and buying costs. Our 5% Deposit Scheme guide explains the checks.
Set your budget before deciding when to buy
I'd be comfortable waiting if buying now meant using every dollar of savings and relying on a rate cut to make the loan work. Equally, a home that suits your needs and fits a sustainable budget deserves a closer look. There is no single best month for every buyer.
Use our mortgage calculator for an initial estimate, then have a broker or lender assess your circumstances before setting an offer limit.
If the repayments are getting difficult
You do not need to cross a particular income percentage before asking for help. If repayments are leaving you short for essentials, or you are using credit to cover everyday bills, review the budget and contact your lender's hardship team early. Moneysmart explains the assistance to ask about. Free financial counselling is available through the National Debt Helpline on 1800 007 007.
What a 0.25 percentage-point increase could cost
This example assumes a loan rate of 6.50% rising to 6.75%, using monthly principal-and-interest repayments and 30 years remaining. It assumes the same loan balance, no fees, no offset balance and no extra repayments. These are example rates, not current loan offers. A 0.25 percentage-point rise costs slightly more at a higher starting rate, so this differs from the 6.00% example in our interest-rate outlook.
On smaller screens, scroll sideways to see every column.
| Loan balance | At 6.50% a year | At 6.75% a year | Monthly increase |
|---|---|---|---|
| $500,000 | $3,160 | $3,243 | About $83 |
| $600,000 | $3,792 | $3,892 | About $99 |
| $1,000,000 | $6,321 | $6,486 | About $165 |
Figures are rounded independently to the nearest dollar. Your lender's rate change, effective date, remaining term and repayment calculation may differ. Check its notice rather than assuming your payment changes on the day of an RBA announcement.
Why refinancing can be difficult
APRA's minimum mortgage serviceability buffer remains 3 percentage points for regulated banks. For a loan rate of 6.5%, that means an assessment rate of at least 9.5%, alongside the lender's other checks. It is a test of repayment capacity, not the rate you pay.
A good payment history helps explain your situation, but it does not guarantee a new lender will approve the loan. Ask about a rate review with your current lender as well as refinancing options. If neither makes the repayments manageable, ask about hardship assistance rather than taking on more debt to cover the gap.
Compare the saving after switching costs
Ask your current lender to review your rate, then compare the offer with alternatives. There is no fixed discount that every long-term borrower can claim. Fees, features, equity and the remaining loan term can change which option is cheaper.
For example, a $600,000 loan with 30 years remaining has a monthly principal-and-interest repayment of about $3,912 at 6.8%, compared with $3,636 at 6.1%. The difference is about $276 a month, or $3,307 a year before fees, assuming the same balance and term, unchanged rates, no offset and no extra repayments. Neither rate is a loan quote.
Include discharge, application and any fixed-rate break costs, plus any LMI that may apply. Extending the term can reduce the monthly payment while increasing total interest. Moneysmart's refinancing checklist explains what to compare.
Check to see if you are eligible for a home loan
How higher rates affect the rest of the budget
Higher borrowing costs can leave less money for other spending. The September RBA statement also noted slower growth in output and signs that consumer spending was easing. Those national trends are useful context; they cannot tell you how secure your own income is.
Allow for changes in income
If overtime, commission or contract work pays part of your mortgage, run a second budget using a lower income. Work out which bills you could reduce and how long your available savings would cover the shortfall. That is more useful than assuming the next change will be a rate cut.
Check the full cost of combining debts
Debt consolidation may reduce monthly payments, but moving a short-term debt into a long home loan can increase the total interest you pay. It can also put your home at risk if previously unsecured debt becomes secured against it.
Compare the total cost and a clear repayment date for each debt before proceeding. Moneysmart's debt consolidation guide explains why a lower monthly payment alone is not enough to judge the deal.
How a mortgage broker can help
A broker can compare lenders, explain how they assess your income and debts, and check the costs of changing loans. Bring your current balance, rate, remaining term and recent statements so the comparison starts with the loan you actually have. You can read reviews of our mortgage-broking service before deciding who to speak with.
Higher rates and falling home values can happen together
Housing supply matters, but it does not guarantee prices will rise while borrowing becomes more expensive. Cotality’s October report put national dwelling values 5.2% below their March 2026 peak. Brisbane was still 5.9% higher over the year despite its September fall. The monthly direction and the annual comparison tell different stories.
Renters face a different budget decision
Compare the rent you would keep paying with the full cost of ownership, including interest, rates, insurance, maintenance and any body corporate levies. Falling sale prices do not tell you what your next lease will cost. If you plan to buy an investment while renting elsewhere, include both properties' cash costs and an allowance for vacancy.
Waiting has costs and potential benefits
Waiting could give you time to save a larger deposit or find a lower-priced home. It can also mean paying rent for longer, and the homes you want may not become cheaper. Put both possibilities into the budget rather than assuming either a rate cut or a price rise will decide it for you.
Treat forecasts as scenarios
CBA expects a national peak-to-trough price fall of around 9%, with stabilisation and recovery during 2027 dependent on rate cuts. That is the bank's forecast, not an RBA commitment or a guaranteed path for your suburb. I would want the purchase to remain manageable if the recovery takes longer.
What to check before your next decision
An updated approval and a loan review
- If you are buying, confirm the amount, expiry and conditions of your pre-approval. Ask for an update if rates, income or debts have changed. Approval remains subject to the lender's conditions and the property; it does not remove the risks of an unconditional offer.
- If you already own, compare your current rate, fees and remaining term with any new offer. Check whether an offset or other feature is saving enough to justify its cost. Keep the loan term consistent when comparing repayments.
Would you like to learn about your situation?
Work out what fits your household
The latest inflation result gives borrowers a reason to keep some room in the budget. The fall in home values gives buyers a reason to check current comparable sales. Neither tells you to rush into a purchase or refinance without checking the costs.
Our team at Hunter Galloway can review your borrowing options and explain what a different loan would mean for your repayments. Call 1300 088 065, contact us or book a free assessment.
More resources for homebuyers
Sources for this update
- RBA: 29 September 2026 cash-rate decision and effective dates.
- ABS: August 2026 Consumer Price Index, released 30 September.
- Cotality: September housing values and October Home Value Index tables, published 1 October 2026.
- CBA Economic Insights (client research note), “Home prices fall further in September while credit growth holds steady in August”, 1 October 2026. Used for the conditional price forecast.
- APRA: mortgage serviceability buffer.
- Moneysmart: problems paying your mortgage and switching loans.
About the author: Jayden Vecchio is a mortgage broker at Hunter Galloway. He helps borrowers compare home loans and understand lending requirements.
General information only. This doesn't consider your objectives, financial situation or needs. Rates, policies and figures change, so confirm current details before acting. Loans are subject to lender approval.