Powered by
MOMENTUM
MEDIA
Find out, in this special announcement from Legal Home Loans, if the Reserve Bank has again decided to raise interest rates, following last week’s shock inflation figures.
At each of its first two meetings for 2026, in February and March, the board of the Reserve Bank of Australia increased the cash rate by 25 basis points, taking the rate from 3.6 per cent at the start of the year to 4.1 per cent, prior to this week’s RBA board meeting.
Today, the RBA has decided, in an 8-1 decision, to increase the cash rate by 25 basis points to 4.35 per cent.
“There are materially heightened uncertainties about the outlook for domestic economic activity and inflation. With the conflict in the Middle East continuing, there are plausible scenarios where inflation is higher and activity lower than envisaged under the baseline forecast. A longer or more severe conflict could put further upward pressure on global energy prices; this would push up near-term inflation and could also increase inflation further out as these costs are passed through, and if price rises get built into longer-term inflation expectations. But higher prices and prolonged uncertainty may cause growth to be lower in Australia’s major trading partners and also in Australia,” the board said.
“As expected, developments in the Middle East are having an impact on inflation. Higher fuel prices are adding to inflation, and there are indications that this is likely to have second-round effects on prices for goods and services more broadly. This inflation impulse is in addition to the high inflation recorded around the start of 2026, reflecting capacity pressures in the economy.”
The news follows last week’s announcement from the Australian Bureau of Statistics (ABS) that the annual consumer price index (CPI) climbed to its highest level in over two years in March, with trimmed mean inflation remaining above the Reserve Bank’s target range. Headline inflation rose 4.6 per cent over the year to March, up from 3.7 per cent in February, data from the ABS showed.
In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes (pictured) said that today’s cash rate hike was anticipated, due to recent inflation figures and global factors.
“The current average interest rate range for residential loans we are seeing today is approximately between 5.7 per cent to 6.2 per cent, depending on the product and your borrowing profile. We expect banks will pass on today’s increase to borrowers within the week,” he said.
“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.
“We are continuing to see strong refinancing activity. Many borrowers are reassessing their current rate, and lenders are considering the consecutive rate hikes this year. Reviewing your loan helps ensure it remains competitive and suited to your needs.”
Fixed interest rates have been gradually increasing every month among some lenders, he went on.
“Rather than attempting to time the market, borrowers should focus on making decisions based on their own financial circumstances and long-term goals,” Haynes said.
“Legal professionals can access certain market advantages that can make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for lawyers to gauge what’s best for your individual situation.”
Jerome Doraisamy is the managing editor of professional services (including Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times). He is also the author of The Wellness Doctrines book series, an admitted solicitor in New South Wales, and a board director of the Minds Count Foundation.
You can email Jerome at:
