The Reserve Bank of Australia (RBA) has raised interest rates for the fourth time this year, bringing the official cash rate (OCR) to 4.60%, its highest levels since November 2011.
The move delivers another blow to borrowers and puts the latest tightening cycle under the microscope as markets assess what comes next.
The decision has immediate implications across the property and lending landscape, with brokers, economists and other market participants weighing up what the higher rate environment means for borrowers, housing demand and the broader economy.
Australian Broker asked a range of industry voices for their take on the RBA’s decision, what they are seeing on the ground and where they think the rate cycle could head from here.
Economist at small business finance and accounting website Xero
"The decision hits small business owners hard, compounding the impact of three previous rate hikes that have already dampened sales. Many small businesses will face a double squeeze, as consumer spending power depresses and their own debt repayments potentially increase simultaneously. Inflation chips away at profit margins, as small businesses lack the pricing power to pass on higher costs to customers. The policy response will deepen the pressure on small businesses as higher rates force some customers to redirect spending towards debt servicing, further dampening sales and squeezing margins. These rate hikes will only tackle domestic demand-driven inflation, they won’t impact the other inflationary force: elevated fuel prices driven by the Middle East conflict."
Chief advocacy officer at not-for-profit aged-care organization Anglicare Sydney
"This rate rise will be felt hardest by people already living on the edge. Because an unwelcome consequence of falling property prices is increasing rents. The banks pass on rate rises. Landlords pass on higher costs. Developers pass up new housing opportunities. But people on low incomes have nobody left to pass the burden onto. All of this means that the cost-of-living squeeze on middle Australia has a vice-like grip on those on the margins."
Economic director of comparison platform Compare the Market
"Rates are higher, loans are bigger, and we have a whole generation of mortgage payers who have never seen rates this high. We can't keep asking the same group of people to keep tightening their belts when there are forces pulling in the opposite direction. Average mortgage payers with a loan around $731,000 will spend roughly $5,568 more over the course of a year, now that rates are a full 1% higher than they were at the start of 2026. Average monthly repayments are now sitting around $4,502. Yet another gut punch for Aussie families with a mortgage. Where are people meant to find thousands of dollars extra a year? And that's after tax. On top of that, households are getting hit at the petrol pump and again at the supermarket."
Chief executive officer of the Real Estate Institute of Queensland (REIQ)
"What many Australians are increasingly questioning is whether they are being asked to bear an unfair share of the burden in the fight against inflation. People understand that inflation needs to be brought under control and that the RBA only has a limited number of levers it can pull. However, rising costs are not the result of everyone living large or luxuriously. For many, a significant share of household income goes towards essential expenses, such as housing, fuel, insurance, groceries and utilities that can’t simply be reigned in. There is a growing perceived unfairness around borrowers 'being punished twice.' First through higher prices, and then through higher interest rates designed to bring those prices under control. It can feel counterintuitive that interest rates rise in response to inflation when that also increases mortgage repayments, rent pressures and the overall cost burden many people are already carrying. That creates a sense of being caught in a cycle where prices remain high, yet the cost of managing those higher prices becomes even more expensive.
Understandably, sentiment is low given current predictions point to more rate rises to come. There’s little light at the end of the tunnel and little hope of reprieve any time soon. It is another blow to property investors, many of whom are still getting their heads around significant changes to federal investor tax settings. We’ve been seeing some early inroads in house supply, but higher borrowing costs combined with uncertainty around property investment settings risks reducing the flow of private capital into new and existing rental housing."
Chief executive officer of Mortgage Choice
"The Reserve Bank’s decision to raise the cash rate is unsurprising. It comes off the back of the latest CPI data, which shows inflation has remained stubbornly high. RBA officials have made it clear that the board is determined to bring inflation down. Until the RBA is satisfied that inflation is trending in the right direction, there is a risk that rates could rise further. This latest hike could add around $90 to monthly home loan repayments for a borrower with a $600,000 variable rate mortgage. My advice to borrowers is to find out whether their home loan is still competitive. If it's been over a year since you reviewed your home loan, speak to your mortgage broker to understand whether it's still the right one for you. And if you’re in the market to buy your first or next home, speak to a mortgage broker to understand how the latest cash rate hike will impact how much you can borrow.”
Chief executive officer of industry body Master Builders Australia
"Australia is sleepwalking into a severe building and construction downturn at precisely the time we need to be building more. The rate increase will prevent developers and builders proceeding with some of the projects they need to progress. Others may still go ahead, but on a reduced scale. Combined with the acceleration of building materials prices and continued labour shortages, the cost of creating new homes far exceeds their likely selling price in many situations. This means they just won’t end up getting built."
Head of data science for Australia and New Zealand at Experian
"Personal loan borrowers are already showing greater signs of strain than mortgage holders. This rate rise may add to financial pressure for households already finding it difficult to manage their repayments. Our August Business Pulse Monthly shows personal loan hardship rose to 2.14% in June, 14 basis points higher than a year earlier. Mortgage hardship eased to 0.92% over the same period, 6 basis points below the same time last year. This could suggest repayment stress is building unevenly, with personal loan borrowers currently showing more signs of pressure. The broader sentiment is also reflected in consumer spending behaviour. The 2026 Experian Spend Index Report found that 41% of Australians were already finding credit repayments increasingly difficult to manage."
Business investment lead at professional advocacy group CPA Australia
"Interest rate increase will be deeply frustrating for households and businesses already struggling with cost-of-living pressures and higher borrowing costs. For many small businesses, the pressure is coming from every direction: higher interest repayments, persistent inflation, volatile fuel prices, rising operating expenses and subdued consumer demand. Many may need to pass on these higher costs to customers. Others may reconsider investment plans, expansion opportunities or hiring decisions to preserve their financial viability."
Chief executive officer of Aussie Home Loans
"Unless inflation is brought under control, further rate rises risk closing the door on first-time homebuyers faster than modestly lower prices can open it. It’s a bleak outlook for homeowners right now staring down the barrel of higher mortgage repayments while watching the value of the family home go backwards. The real danger is the trap that creates: as values fall, loan-to-value rates rise. Once you push above 80%, the door to a competitive refinance can start to slam shut. That’s how homeowners end up in mortgage prison, stuck paying a higher rate precisely when they can least afford it.
But while first-time homebuyers can’t control market forces, higher interest rates have not removed every opportunity, especially for those who stay informed and get support. Brokers and buyer's agents exist to help you make a confident, informed decision. Getting support is more important than ever when the market is this tough.”
Head of investments and capital markets at global investment firm VanEck
"The unfortunate reality is that we will likely need one more rate rise to tame inflation. But in our view, a third hike is one too many. The market has already priced in another rate hike by February next year. But we think it may come as early as the RBA’s December meeting as the knock-on effects of the September spike in oil prices have yet to ripple through the supply chain and down to the consumer. At 4.6%, we now have the highest cash rate in 15 years, and the highest in developed economies. But I don’t think it will stop there. Another rate increase is highly likely."
Chief economist at property valuation and advisory firm Herron Todd White
"Inflation has slowed but remains higher than forecast, and with oil prices surging and fuel a key input to many goods and services, it is likely that inflationary pressures will persist and may even strengthen. Monthly data on household spending shows that spending continues to grow at an annual rate well above inflation, and discretionary spending is growing faster than non-discretionary spending, which indicates that households still aren't reigning in their spending enough to slow inflation.
The market currently expects that it is more likely than not there will be another rate increase before the end of the year, and then another interest rate increase in 2027. For the housing market, this rate increase at a time when housing affordability is already stretched will further reduce borrowing capacities. It is likely to contribute to further price declines, reduced demand to buy, resulting in lower sales volumes and properties taking longer to sell."
Managing director APAC at employee benefits technology company Reward Gateway | Edenred
"The RBA's decision to push the cash rate to a 15-year high puts relentless pressure on household budgets, directly impacting workplace performance and productivity. With eight in 10 Australian workers already tightening their pursestrings over the past 12 months, mounting living costs are compounding financial stress. In this environment, workers are now closely scrutinising whether their overall compensation packages reflect their day-to-day economic realities and questioning what a genuinely competitive employee experience looks like."
