The short answer: the Reserve Bank lifted the cash rate by 0.25% on 29 September 2026, to 4.60% (RBA, Cash rate target). It's the fourth rise this year and the highest the cash rate has been since 2011. No one needs to panic, and there's a side to this that the headlines aren't covering.
I've had a few messages about it already, which is completely understandable, so here's the full picture rather than leaving it to the headlines.
Why the RBA keeps lifting
Inflation has been sitting above the RBA's 2 to 3% target band since the middle of last year, and spending and employment have held up more than expected.
So the RBA keeps lifting rates to slow things down. It's not fun when you have a mortgage, but it's really the only lever they have.
What it means for your repayments
Say your loan is around $600,000. A 0.25% rise adds roughly $125 a month in interest.
It's worth remembering that when your loan was approved, the bank tested you at about 3% above the rate you actually pay. So you were always assessed as being able to handle moves like this, with room to spare. (I went through how that test works for offshore borrowers in The 2026 rate rises and your borrowing power.)
The repayment still comes out of your account, of course. If you're paid in Singapore dollars, Hong Kong dollars or dirhams, I always suggest holding a buffer in Australian dollars, so the exchange rate isn't deciding your repayment month to month.
Where the banks think rates go next
I wish I had a crystal ball to tell you what the future looks like. What I can tell you is that all four major banks are now forecasting rate cuts in 2027.
| Bank | Forecast as at 30 September 2026 |
|---|---|
| CBA | Cuts from around August 2027 |
| Westpac | Cuts from around August 2027 |
| NAB | Possibly one more rise in November, then cuts in 2027 |
| ANZ | Possibly one more rise in November, then cuts in 2027 |
These are the banks' own published forecasts. They change without notice.
Forecasts change, but they're all pointing in the same direction now: we're at or near the top of this cycle.
Where the opportunity is
While rates have been rising, prices have been falling. National home values fell again in September, the sixth monthly fall in a row, and are now 5.2% below their March peak. Listings are up 23.1% on a year ago (Cotality, Australian housing values down for sixth straight month in September).
Across the three months to September, 97% of capital city suburbs lost value. In Sydney especially, I'm seeing properties go for 10 to 15% less than they would have at the start of the year.
A lot of buyers are sitting on their hands at the moment, which is also why lenders are competing harder for the business that is there. That helps on the lending side too.
So for anyone who's been waiting to get back into the market, it's not been a bad time to get in. We haven't had a strong buyers' market for many years in some of these cities, so it gives you real negotiating power, especially in Sydney and Melbourne.
Prices may drift a little lower over the next three to six months, but trying to time the bottom of the market is always difficult, and property is a long-term game. If the banks are right about cuts next year, history suggests a lot of those buyers on the sidelines come back quickly once rates start falling, and the extra choice and negotiating room tend to go with them.
I covered a lot of the previous downturns and bounce-backs with Luke Pervan on the podcast: The Aussie Expat Podcast, Ep 16: what history says about buying in a downturn.
If buying back home is on your mind
If buying back home has been in the back of your mind, or you've been thinking about when is a good time to enter, the time is when everyone else is exiting. The fundamentals that drove property prices, higher migration and lower building, are still there.
The sensible first step is simply knowing your number: what you could borrow with your overseas income. That way, if the right property comes up, you're in a position to move.
Want to know your number?
If you'd like to see what a lender would look at with your overseas income, book a call with our team, or WhatsApp us on +65 8096 6873.
Sources
- Reserve Bank of Australia: Cash rate target (accessed 9 October 2026)
- Cotality: Australian housing values down for sixth straight month in September, 1 October 2026 (accessed 9 October 2026)
Aussie Expat Home Loans holds Australian Credit Licence 509125. This article is general information only and doesn't take your personal circumstances into account. It is not personal financial, tax or credit advice, and nothing here is a forecast of property prices or interest rates. The bank forecasts are theirs and change without notice. What you can borrow depends on your circumstances and lender policy, both of which change. Specific recommendations require a formal Statement of Credit Assistance. This article was first sent to our clients by email on 30 September 2026.
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