Associations urge early loan reviews after rate hike

The setting is the highest since November 2011 and follows renewed inflation concerns, with the central bank seeking to restrain demand in an economy operating beyond capacity.

The move had been widely anticipated by financial markets and all four major banks.

The MFAA said the latest increase could add about $100 a month, or around $1,200 a year, to repayments on a $600,000 home loan.

MFAA chief executive Anja Pannek said the additional cost would be felt by households already balancing elevated living expenses.

“For a household already managing higher living costs, another $100 a month is meaningful. It is money that has to come from somewhere else in the family budget,” Pannek said.

“A cash rate of 4.60 per cent makes it even more important for homeowners to look closely at their home loan rather than simply absorbing another increase without understanding what options may be available.”

Review before hardship emerges

Pannek said a loan review could involve a range of possible outcomes, depending on each borrower’s financial position, lender and serviceability

“The first step should be speaking with your mortgage broker and understanding your current position. That could mean asking your existing lender for a better rate, restructuring your loan or looking at whether refinancing to another lender could deliver a better outcome,” she said.

“Mortgage brokers provide borrowers with access to competition and choice across the lending market and can help them understand how different options apply to their individual circumstances.”

However, Pannek cautioned that refinancing would not necessarily be accessible to every borrower, particularly as serviceability constraints re-emerge as an obstacle to switching lenders.

The MFAA’s August 2026 Market Sentiment Survey of 588 brokers found 49.2 per cent were seeing more clients unable to refinance because of serviceability requirements, more than double the 24.4 per cent reporting the same issue six months earlier.

Pannek said the result reinforced the value of reviewing options before repayment difficulty became more acute.

“This is why getting on the front foot is important,” Pannek said.

“Borrowers shouldn’t wait until they are struggling with repayments before reviewing their position. A rate rise affects every household differently; the important thing is to know where you stand rather than assuming there is nothing you can do.”

FBAA calls for proactive contact

Meanwhile, FBAA chief executive Leo Gagic said the latest increase was another warning that consumer financial pressure remained elevated, with conditions potentially remaining difficult in the months ahead.

“Today’s RBA rate increase is yet another reminder that many Australian borrowers continue to face financial pressure. The months ahead may present further challenges for consumers,” Gagic said.

He noted that client contact could be particularly important for households already finding their mortgage commitments hard to manage.

“We know the vital role brokers play during times like these; I encourage brokers to be proactive and connect with their clients, particularly those who may already be finding repayments difficult,” he said.

“A simple conversation can provide reassurance, help a client understand what this increase means for them and identify whether their lending arrangements should be reviewed.

“That guidance and support helps clients make informed decisions when they need it most.”

[Related: Rate hikes erase price-fall borrowing gains]