RBA Raises Interest Rates
FEBRUARY 2026 – 3 minute video
The Reserve Bank of Australia has lifted interest rates again, increasing the cash rate by 25 basis points to 3.85 per cent. While that might sound like a small move, it can have a noticeable impact across the property market. Let’s break down what this actually means for homeowners, buyers, sellers, and renters.
For homeowners with a mortgage, those on a variable rate can expect their bank to pass on the full increase. On a $600,000 mortgage, this typically means an extra $90 to $100 per month in repayments. For households already managing rising living costs, this additional expense can put further pressure on the budget. Fixed-rate borrowers won’t feel the impact immediately, but anyone whose fixed rate expires this year may face significantly higher repayments. This is where being proactive matters — reviewing your loan, negotiating your rate, or speaking with a mortgage broker about your options can make a real difference.
For buyers, higher interest rates reduce borrowing capacity. Even modest increases can cut tens of thousands of dollars from what a bank is willing to lend. This may require adjusting expectations around price, location, or timing. Some buyers may choose to wait, but demand hasn’t disappeared. In cities like Perth, Brisbane, and Darwin, prices are still rising and competition remains strong. If you’re planning to buy this year, understanding your true borrowing capacity is more important than ever.
For sellers, rate rises can dampen buyer confidence, particularly among first home buyers. However, housing supply remains tight in many markets, which is helping to support prices — especially for well-located, well-presented properties. Accurate pricing is critical. Buyers are more cautious, finance is tighter, and overpriced homes are being identified very quickly.
For renters, interest rate rises don’t directly change rents, but they can influence them over time. Some landlords facing higher mortgage costs may attempt to pass those costs on where market conditions allow. At the same time, reduced buyer activity can mean more people staying in the rental market for longer, adding pressure to already tight conditions. As a result, rents may remain elevated, particularly in capital cities with low vacancy rates.
The bottom line is that this latest rate rise is a reminder inflation remains a challenge, and interest rates may stay higher for longer than many hoped. Whether you’re buying, selling, owning, or renting, understanding how these changes affect your position helps you make calm, informed decisions in a shifting market. And right now, clarity is everything.
