Key takeaways:
RBA cash rate rises to 4.35% after a 25 basis point increase
Fixed rate interest is rising but fewer borrowers are rushing to lock in
Borrowing power is under pressure as higher rates affect serviceability
First home buyers and stretched borrowers are most likely to seek repayment certainty
Brokers say timing and loan structure matter, especially in a fast-moving market
The Reserve Bank of Australia (RBA) has lifted the cash rate by 25 basis points to 4.35%, adding fresh pressure to borrowers already managing tighter budgets, reduced borrowing power and rising living costs.
The move effectively returns rates to where they were before the recent round of cuts in 2025, reinforcing how quickly lending conditions can shift.
The announcement has sharpened attention on fixed rate home loans, but brokers say Australians are not rushing in a panic.
Instead, many have already been bracing for higher repayments and are now deciding whether certainty, flexibility or a mix of both is the better fit.
Aussie Buyer’s Agent, Patrick Boyce, said most clients were not caught off guard.
“I wouldn’t say anyone is rushing,” he said. “In our strategy sessions, we already factor in potential rate rises when doing cash flow analysis.
“People expect rates to go up, so it’s already in their thinking. Those most affected are clients who are stretching themselves to buy. "
For borrowers weighing their options, speaking with an Aussie broker may help clarify the right loan structure, whether that’s fixing, staying variable or considering a split approach, depending on your goals and individual circumstances, as well as potential rate changes ahead.
If you’re still exploring the market, a free consultation with an Aussie Buying Coach can help you understand local conditions, price expectations and where you may be able to buy.
Doing it alone can make it harder to factor in shifting market dynamics or forecasted changes, so having a professional on your side can help you make more informed decisions from the outset.
Fixed rates are back in focus, but the timing remains complex
Search behaviour reports also show a more than 250% increase in searches for “fixed rate mortgage” between January and March 2026 compared to the same period last year.
Meanwhile, interest in variable options declined, with searches for “best variable interest rate” and “variable mortgage rates” down 71% and 58% year-on-year, respectively.*
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Aussie mobile broker Samantha Harvey said many clients feel they’ve already missed the best window to fix, with much of the demand happening earlier.
“A lot of clients feel like they’ve missed the boat on fixed rates,” she said. “A lot of people who wanted a fixed home loan did so earlier in the year or late last year.”
Others are weighing whether settling on a fixed rate today means locking in at a rate already above their current variable loan.
“It comes back to trying to predict a very unpredictable future,” Harvey said.
In a fast-moving rate environment, comparing options across multiple lenders can make a difference. An Aussie Broker can help you assess whether current fixed rates align with your goals, or if a variable or split loan structure may be more suitable.
Fixed versus variable is now a pricing trade-off
The latest rate hike has made the fixed versus variable decision more complex.
Fixed rates have moved higher alongside market expectations, meaning borrowers may need to pay a premium for certainty. At the same time, variable rates are expected to rise further if additional hikes materialise.
Johnathan McMenamin, a senior economist at investment banking firm Barrenjoey, said fixed rates are already aligned with where markets expect rates to settle over the next few years.
“A lot of the fixed rates have moved up, consistent with where the market is pricing rates to be,” he said. “And we don’t expect cuts until December 2027.
“That’s the sort of framework I would think about when considering whether you want to go with a fixed or a variable rate mortgage."
Harvey said borrowers’ decisions ultimately come down to their individual circumstances, noting that a fixed rate won’t suit everyone.
“I always come back to the fundamentals of fixed versus variable,” she said. “Do you need certainty right now? Are you feeling stretched? What’s your ‘sleep at night’ factor? Fixing gives you repayment certainty and makes budgeting easier.
“Or do you need flexibility? Are you planning to sell soon? Can you ride out this period without feeling stressed? That’s where a variable loan can be the better fit.”
You might also be interested in: What to do if your mortgage repayments increase
First home buyers and stretched borrowers are most likely to seek repayment certainty
Borrowing capacity is tightening
The rate increase to 4.35% is also feeding through to borrowing power.
Higher interest rates increase the serviceability buffer lenders apply, reducing the amount borrowers can access. This is already affecting both buyers and refinancers.
“I’ve had a couple where we’ve had to act quickly because once the interest rate goes up again, they’ll have a borrowing capacity issue,” Harvey added.
“For buyers, that can mean adjusting expectations on price or property type. For refinancers, it can limit the ability to switch lenders purely for a better rate.”
With borrowing capacity shifting as rates change, reviewing your loan and lender options early could help you understand what’s still within reach.
A quick chat with an Aussie Broker can help you assess your current position and explore options based on your situation.
Who is considering fixed rates?
While overall demand is mixed, certain borrower groups are still leaning towards fixing.
Brokers report this includes:
First-home buyers managing tighter budgets
Single applicants more exposed to repayment increases
Households seeking certainty during income changes
Aussie Hervey Bay broker, George Farmer, said first-home buyers are driving much of the current interest.
“Their budgets are generally stretched a little tighter, so fixing gives them more certainty,” he said.
At the same time, more experienced borrowers with stronger financial buffers are more likely to remain on variable rates, using offset accounts or extra repayments to manage costs.
You might also be interested in: What is a serviceability buffer and how does it affect your home loan?
What this means for borrowers right now
The latest rate hike reinforces how quickly lending conditions can change.
Fixed rates have already adjusted, and further changes are likely if markets continue to expect additional tightening. That means borrowers considering fixing are making decisions in a moving market, where pricing can shift before or after official announcements.
Farmer said conversations are now centred on making sure borrowers are not overextending themselves.
“Cost of living is going up, fuel prices and interest rates are rising, and wages are not keeping pace,” Farmer said.
“We spend a lot of time talking to customers about what their borrowing capacity looks like, but also encouraging them to give themselves some breathing room, to give themselves a buffer.”
In a market where both timing and loan structure can impact your repayments, reviewing your options sooner rather than later can help you make a more informed decision.