RBA reveals March 2026 cash rate decision

In a statement, the board said that while inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.

“Information since the February meeting suggests that some of the increase in inflation reflects greater capacity pressures. In addition, the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation. Short-term measures of inflation expectations have already risen. As a result, the board judged that there is a material risk that inflation will remain above target for longer than previously anticipated,” the board said.

“Higher capacity pressures reflect, in part, the greater momentum in demand in the latter part of 2025. Growth in private demand strengthened substantially more than was expected in mid-2025, although the composition of that growth surprised in the December quarter. Business investment was above expectations, and consumption was below expectations. Meanwhile, growth in unit labour costs declined. More recently, the unemployment rate has been a little lower than expected, and measures of labour underutilisation remain at low rates. Activity and prices in the housing market grew strongly over the past year, although housing price growth moderated somewhat at the start of 2026.

“Financial conditions have tightened a little this year, but the extent to which monetary policy is restrictive is uncertain. Credit is readily available to both households and businesses, and the effects of interest rate reductions in 2025 are yet to flow through fully to aggregate demand, prices and wages. The exchange rate, money market interest rates and government bond yields have risen over the past month. In large part, higher interest rates reflect expectations for the path of monetary policy, which have risen in Australia and most other advanced economies in response to the expected inflationary implications of the conflict in the Middle East.”

In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes (pictured) said that today’s cash rate hike was “not the result we wanted to see, but unfortunately, not massively unexpected”, given recent inflation data and global factors.

“We expect banks will pass on today’s increase to borrowers within the week. The current average interest rate range for residential loans we are seeing today is approximately between 5.6 per cent [and] 5.9 per cent, depending on the product and your borrowing profile,” he said.

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“Every 25-basis-point (0.25 per cent) increase adds approximately $161 per month to repayments on a $1 million mortgage and can reduce borrowing capacity by around $30,000 to $40,000.”

If legal professionals are concerned about rising mortgage repayments and the impact on their household budgets, Haynes continued, “we recommend speaking to your bank or broker to explore the best structure suited to your needs”.

“Doing so will not impact your credit history, and it is better to reach out early before falling into arrears,” he said.

“Property prices are continuing to increase nationally, with economists forecasting further growth across 2026. So, if you’re considering purchasing a property, now is a good time to get your pre-approval in place. Having pre-approval ready ensures you can move quickly when you find the right property.”

Legal professionals can access certain market advantages that can make entering the property market more attainable and realistic for the cohort, Haynes concluded.

“It’s best to speak to a specialist broker for lawyers to gauge what’s best for you,” he said.