Fresh data has pointed to a sharp shift towards neutrality and caution as borrowers digest February’s cash rate rise and brace for another RBA decision.
The Mortgage and Finance Association of Australia’s (MFAA) February 2026 Market Sentiment Survey, based on responses from 443 brokers across the country, has shown a clear swing away from confidence in household finances as higher interest rates reshape borrower behaviour.
Sentiment swings to neutral and negative
Almost a quarter of borrowers (24.2 per cent) are now assessed as feeling negative about their financial outlook, up 5.3 percentage points since the previous survey in August 2025.
More than half (55.3 per cent) are neutral, an 8.5‑percentage‑point jump, while the share feeling positive has fallen to 20.5 per cent, a 13.7‑percentage‑point drop over the same period.
MFAA CEO Anja Pannek said the interest rate backdrop had once again become central to how households viewed their finances.
“The interest rate environment had re‑emerged as a key driver of deteriorating sentiment,” she said.
RBA move and expectations sharpen borrower focus
The survey was conducted following the Reserve Bank of Australia’s (RBA) decision to raise the cash rate to 3.85 per cent at its February meeting.
Describing how quickly that decision had filtered through to households, Pannek said brokers were already seeing the impact on clients’ mood.
“Our February survey was conducted shortly after the RBA increased the cash rate, and brokers are already seeing how that shift is influencing borrower sentiment,” she said.
Pannek said the data showed that borrowers were increasingly turning their attention towards repayment strategies as opposed to new borrowing.
“With the Reserve Bank meeting on Tuesday and markets expecting further tightening, borrowers will be increasingly focused on managing home loan repayments and household budgets,” Pannek said.
Rates, living costs, and housing supply drive caution
The survey revealed that interest rates had become the leading factor behind neutral sentiment, after ranking third in August 2025, underscoring how directly the cash rate shapes household expectations.
Cost‑of‑living pressures remained the strongest driver of negative views, with interest rates now the second‑ranked drag, up from sixth place.
Housing supply constraints held onto third position as a source of concern.
By contrast, the data showed that borrowers who remained upbeat tended to be supported by stronger balance sheets.
According to the survey, equity position, job security, and savings levels were the main factors underpinning positive sentiment, signalling a widening gap between more resilient households and those under strain.
Yet sentiment differed markedly by state.
Western Australia recorded the highest share of negative sentiment, with brokers pointing to worries over housing supply and availability, while Queensland emerged as the most positive state, helped by stronger equity positions and employment conditions.
Pannek said international developments were also shaping borrowers’ sense of risk and the outlook for inflation.
“Ongoing global uncertainty, including tensions in the Middle East and the impact on inflation, will likely add to borrower caution. This reinforces the value of mortgage brokers supporting their clients through changing market conditions,” she said.
Brokers step up repricing and budgeting support
Against this backdrop, the survey indicated brokers were heavily involved in helping clients adjust to the new rate environment.
In the six months to February, 97 per cent of brokers reported helping clients secure a discount on their loan, while another 97 per cent assisted with refinancing to a new lender.
Budget support has also become part of the day‑to‑day conversation, with 84 per cent of brokers working with clients on budgeting strategies over the past half year.
[Related: Rate spectre fuels refinance wave as mortgage demand surges]
