Two-thirds of Australians say they would be worse off if the Reserve Bank lifts the cash rate again this year, according to new research from Compare the Market, exposing a widening split between households still paying off a mortgage and those who own their home outright.
Despite already absorbing three rate hikes in 2026, 65% of those surveyed said a further increase would negatively affect their household, against just 35% who expected minimal impact.
With roughly 31% of Australians owning their home outright, the results point to a two-speed economy, where mortgaged households and renters face mounting pressure while debt-free owners retain greater spending capacity — a gap that risks softening the effect of further rate rises on inflation.
Nearly three in ten respondents (29%) said they would cut discretionary spending in response to another hike, while 21% said they would need to pull back on essentials such as groceries, fuel, and utilities. Others pointed to dipping into savings (16%), delaying major purchases (13%), taking on extra income (12%) or growing concern over rising rents (11%). Notably, 17% said a further rise would add to their financial stress or anxiety.
The cash rate has risen 0.25 percentage points in February, March, and May this year before holding steady in June, and currently sits at 4.35%. Industry attention has now turned to the RBA's next meeting on 11 August, where economists and brokers remain divided, though many expect the board to hold rather than deliver a fourth increase.
Household budgets already stretched
In the meantime, many households are already feeling the strain of the increases to date.
Compare the Market's economic director David Koch (pictured) said many borrowers were nearing their limit.
"While another rate rise might look modest on paper, many Australians feel like they've already absorbed as much as they can," Koch said. "The reality is a 0.25% increase would add around $120 a month to an average $735,000 loan. That's not exactly loose change and families need to find that money somewhere."
He said the impact extended well beyond loan repayments.
"People aren't just worried about higher mortgage repayments; they're also concerned about what it could mean for their grocery bill, savings, financial goals and overall wellbeing," Koch said.
Despite the pressure, the research found many mortgage holders remain reluctant to shop around. More than a quarter (28.4%) admitted they should be seeking a better deal but hadn't acted, while 11.4% said they didn't know where to start.
Koch urged borrowers to review their current rate.
"If you've been with the same lender for years and haven't compared your options recently, you could be paying more than you need to," he said.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
