Rates went up again. The RBA lifted the cash rate by 25 basis points to 4.35% at its May 2026 meeting. If you're on a variable home loan in Brisbane, your repayments are about to climb. If you're on a fixed rate, nothing shifts until your fixed period ends. If you're thinking about buying or refinancing, your borrowing power has probably shrunk a bit more.
That's the headline. The rest of this is about what to actually do with that information, depending on where you sit. We'll cover variable borrowers, fixed-rate borrowers rolling off, first-home buyers, construction loans, investors and self-employed borrowers. Each situation needs a different response.
A quick note on tone before we go further. We're not going to pretend we know exactly where rates land in 12 months. Nobody does. What we can do is walk through what's likely, what the RBA has actually said, and what's worth acting on now versus what's worth sitting on.
The Reserve Bank moved the cash rate up by 25 basis points, from 4.10% to 4.35%. The reason centred on persistent services inflation, particularly rents, insurance and household services, alongside rising inflation expectations. The Bank's view is that inflation hasn't returned to the 2-3% target band fast enough, and the labour market, while softening, hasn't softened enough to take pressure off prices on its own.
This is the second hike in the current cycle. For most Brisbane borrowers, the calculations you ran in 2025 about your repayments are now out of date.
The next RBA rate decision is in July 2026. Current market pricing suggests the Bank is in a wait-and-see position, but two more hikes this year aren't off the table if services inflation stays sticky. The much-discussed "rate cuts in late 2026" story has quietly shifted to "possibly 2027." More on that below.
Right, the actual numbers. That's what most people want.
On a $600,000 variable home loan at 6.3%, principal and interest over 30 years, the monthly repayment is roughly $3,716. Push that to 6.55% and the repayment becomes about $3,815. That's an extra $99 a month, or $1,188 a year.
On a $750,000 loan, the same 25 basis point move adds around $124 a month. On a $1 million loan, it's roughly $165 a month.
Most major banks pass on RBA hikes in full to variable rates within two to four weeks of the decision. Some lenders move faster on the rise than they do on the cut. That's not new, but it's worth knowing when you're comparing where to put your loan.
If you're not sure how the hike lands on your specific loan, our borrowing power calculator gives you a rough position, and a 20-minute call sorts the rest.
This is the group we're hearing from most. A lot of Brisbane borrowers locked fixed rates between 2021 and 2023, when fixed rates sat below 3%. Those loans are now rolling off into a variable rate environment around 6.0% to 6.5%.
If your fixed period ends in the next six months, the time to look at options is now, not the week your fixed rate finishes. Most lenders will roll you onto their standard variable rate, which is rarely their sharpest rate. Refinancing or repricing with your existing lender before the rollover gives you negotiating room you don't have once you're already on the new rate.
A few practical things to check:
What's your current rate, and what does it become on rollover?
What's your loan-to-value ratio (LVR) now, given Brisbane property values have moved since you bought?
Do you have an offset account, and are you using it properly?
Are there any break costs if you act before the fixed period ends? Usually there aren't on fixed loans nearing the end, but worth confirming.
We've written a longer piece on how to refinance a home loan that walks through the process step by step.
The "wait for rate cuts" anchor is the single most expensive idea floating around right now.
Here's the maths. On a $600,000 loan, the difference between 6.3% and 6.35 is about $100 a month, or $1,200 a year. Waiting 12 months hoping for a cut that may not come until 2027, and you've paid $1,200 in extra interest. That's more than the break cost on most fixed loans, and more than the application fees on most refinances.
The RBA's own framing matters here. Governor Bullock and the Board have flagged that services inflation, particularly rents and insurance, is the bit holding inflation up. Those components are slow to move. They don't respond to rate decisions the same way discretionary spending does. The honest read is cuts are further away than the headlines suggested 12 months ago.
That doesn't mean you panic-refinance. It means you don't sit on a 6.7% loan when 6.3% is available and tell yourself you're waiting for 5.8%. If a refinance saves you money today, the calculation is today's saving, not the imagined one in 18 months.
There's good news and bad news.
The good news. Rate rises and the recent May 2026 Federal Budget may take heat out of investor demand. Investors run on yield maths, and when rates rise, the gap between rental income and loan repayments widens. A lot of investors quietly stop bidding. That gives first-home buyers a clearer run at properties under $1,000,000 in suburbs like Carindale, Wavell Heights, Wynnum and the inner west so they can access the First Home Guarantee scheme.
The bad news. Rate rises also shrink your borrowing power. A 25 basis point hike doesn't just lift your repayment, it lifts the rate banks use to assess your serviceability. Banks add a buffer on top of the actual rate, usually around 3%. We generally find that each 0.25% increase in interest rates reduces your borrowing capacity by 2%. For example if you had a pre approval to spend $800,000 earlier in the year, after the May 2026 rate rise your borrowing capacity with that same lender is $784,000.
The bigger risk for first-home buyers in 2026 isn't the rate itself. It's employment. Construction and retail are softening. Lenders are quietly tightening their assumptions about discretionary spending and overtime income. If your income includes a lot of variable components, expect more questions than you got earlier in 2026.
If you're early in the process, our first home buyer page covers the grants and schemes still in play in Queensland.
Construction loans get awkward in a tightening cycle, and most borrowers don't see it coming.
Here's the trap. You lock a fixed rate on stage one of your build in early 2025. The build runs over time, which most do. By the time stage three or four draws down, the rate environment has moved. That second drawdown comes through at the new variable rate, not the rate you locked. Suddenly you're paying two different rates on the same project, and your monthly cost is higher than the budget you set 12 months ago.
A 25 basis point rise mid-build adds roughly $150 a month on a $500,000 drawdown. Not catastrophic, but not in most build budgets either.
Two things help. One, build a buffer into your construction budget for rate movement, not just cost blowouts. Two, talk to your broker before drawdown stages, not after. Sometimes there's a case for switching the structure between stages, sometimes there isn't, but it's a conversation worth having while the option still exists.
The rental yield maths in Brisbane has shifted again. Higher rates mean higher repayments, but Brisbane rents have also kept climbing, particularly in the outer ring and Moreton Bay corridor. For a lot of investors, the cashflow position is tighter than 2023 but not as broken as the headlines suggest.
A few things to think through:
Interest-only periods rolling to principal and interest. This is a much bigger jump than any rate hike. If your interest-only ends in 2026, model the new repayment now.
Tax position. Negative gearing is more valuable when rates are higher, but it doesn't help cashflow. You still need to fund the difference each month. The May 2026 Federal budget now means you can only negatively gear new build or off the plan homes.
Portfolio-wide LVR. If you've got multiple properties, the cross-collateralised position you set up in 2021 might not be the best structure now. Worth a review.
Self-employed borrowers in Brisbane face a sharper version of the same trade-off they always face. Tax minimisation versus borrowing power.
Just be aware that at this time of year you'll need to do your tax returns for FY25/26. The bank will look at your profit or taxable income, as well as debts and other factors to help determine your borrowing capacity.
Each one of the recent rate rises is reducing your borrowing capacity, so the higher your income the better your borrowing power will be to buy the home you want.
At the moment, each $1 of income generally means about $4 to $4.50 in borrowing capacity. For example, a taxable income of $200,000 can mean a borrowing capacity of $800,000 to $1,000,000.
This is the kind of conversation that needs your accountant and your broker on the same page. We're happy to be in that meeting.
A few simple positions, depending on where you sit.
Variable borrowers with no plans to refinance. Check your offset balance. Money sitting in your offset is now saving you the interest rate you are paying. That's a strong return for cash you might otherwise leave in a savings account. We negotiate with your lender your behalf every year for a rate reduction so you should already be on a competitive rate.
Fixed borrowers rolling off in the next six months. Start the conversation now. Repricing with your current lender or refinancing to a new one is easier when you have time, not when the rollover hits next week.
Borrowers thinking about buying. Get your borrowing capacity reassessed. The number you got in 2025 and early 2026 is no longer accurate. Knowing your real budget before you bid saves a lot of wasted weekends.
Borrowers waiting for rate cuts before acting. Reconsider. The data we've got from the RBA suggests cuts are further out than the market priced in 12 months ago. Acting on today's numbers usually beats waiting on tomorrow's.
We are in Brisbane and we've been doing this since 2007. You'll deal directly with Victor, who's been in lending for 19 years, with a small team behind him doing the legwork. We compare more than 50 lenders, structure the loan around your actual situation, and stay across approval and settlement.
In 2025 we had 99.6% of the loans we applied for on behalf of our clients approved. In an industry where declines are common, having this reassurance and certainty is important. That's not a marketing line, it's a function of doing the homework before we lodge.
If you're on the Gold Coast or Sunshine Coast, we work across Queensland with offices supporting Burleigh Heads and Mooloolaba as well.
Book the 20-minute call. It's free, there's no pressure, and you'll leave with a clearer view of where you actually stand.
