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Find out – in this special announcement from Legal Home Loans – whether the Reserve Bank has heeded calls from the big banks to once again increase interest rates.
At its previous meeting, in August, the Reserve Bank of Australia (RBA) determined, in a unanimous decision, to hold the cash rate at 4.35 per cent. This was the second consecutive meeting at which the board opted to hold the rate, following increases at its preceding three meetings.
Today (29 September), the RBA board decided, in a unanimous decision, to increase the cash rate by 25 basis points, to 4.6 per cent.
In its statement, the board said: "Since the previous meeting, some of the upside risks to inflation are materialising. There have been further disruptions to global oil supply and recent data suggest that growth and inflation in Australia have been higher than expected. Higher fuel prices have partially been passed through to prices of other goods and services. This inflation impulse is in addition to the effect of capacity pressures in the economy."
"The Board remains focused on ensuring that high inflation does not become embedded. To achieve this, growth in aggregate demand needs to remain subdued for a period to reduce capacity pressures and bring inflation back to target. The three increases in the cash rate target since the beginning of the year have tightened financial conditions and the economy appears to be slowing. But inflation is still too high and the Board judged that, in light of recent developments, a further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period," it said.
"The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed. Accordingly, the Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. Monetary policy is well placed to respond to developments, and the Board is focused on its mandate to deliver price stability and full employment."
In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes said that today’s cash rate hike was “not the outcome we had hoped for, but [was] anticipated”.
“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,” he said.
“Based on today’s decision, if you haven’t reviewed your home loan this year, now could be a good time to take a look. After four rate hikes this year, your current rate may no longer be as competitive as what’s available in the market.”
“Residential home loan rates are currently sitting around 5.9 per cent to 6.5 per cent, depending on the lender, loan size, LVR and borrower profile, with rates starting from 5.89 per cent. Refinancing may provide an opportunity to secure a more competitive rate, reduce repayments or access equity for other goals, depending on your circumstances,” he said.
While inflation eased slightly in July, Haynes continued, it remained above the RBA’s target range.
“The path for future rate movements will continue to depend on how inflation develops, so there is still some uncertainty around what comes next,” he said.
“The property market is also showing signs of change. National home prices have fallen for five consecutive months, with prices now below their March 2026 peak. Increased listings, longer selling times and greater vendor discounting are also giving buyers more room to negotiate. For those looking to enter the property market, these conditions may create more opportunities to find the right property and negotiate on price.”
“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,” Haynes said.
“Our $500 refinance cashback is currently available and can be combined with eligible Law Society rebates and lender cashback offers.”
