The RBA Just Left Mortgage Holders Waiting

The Reserve Bank held interest rates at 3.6% this month, and the message for mortgage holders is clear: don't expect relief anytime soon.

Last week's RBA decision came as no surprise to markets, but the tone from Governor Michele Bullock has changed. While she hasn't ruled out future cuts entirely, the central bank's updated forecasts and cautious language suggest rate relief could be further away than many hoped.

EY's chief economist has suggested we might see zero additional cuts in this cycle. NAB is forecasting just one cut, potentially in May 2026. The RBA itself is taking a "data dependent" approach, which essentially means they're monitoring inflation closely before making any moves.

Why the pause?

The September quarter inflation data came in higher than the RBA expected. While some of the increase came from temporary factors like higher petrol prices and the rollback of electricity rebates, underlying inflation remains sticky. This has prompted the RBA to raise its inflation forecasts and adopt a more cautious stance.

For Australians managing mortgage debt, this means the payment relief many were budgeting for may not arrive as expected. Interest rates have been cut three times this year, from 4.1% down to the current 3.6%, but further cuts appear unlikely in the near term.

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The situation for mortgage holders

If rates remain at 3.6% for an extended period, monthly mortgage payments won't decrease. Many households had factored potential rate cuts into their budget planning, and this pause changes those calculations.

The RBA has indicated it's not following a predetermined path. Future decisions will depend on incoming economic data, particularly inflation figures. The next major indicator will be the quarterly consumer price index report.

By the numbers

• Current cash rate: 3.6% (unchanged)
• Rate cuts delivered in 2025: Three (February, May, August)
• Potential cuts in 2026: Economists forecasting between zero and one
• The RBA's inflation target: 2% to 3%

What this means for your finances

Rather than waiting for rate cuts that may not eventuate, consider reviewing your current mortgage arrangements. Some options to explore include:

• Comparing your current rate with what's available in the market
• Speaking with your lender about your options
• Adjusting your budget based on rates staying steady
• Making additional repayments when your cash flow allows

The RBA's cautious approach reflects ongoing uncertainty about inflation. While this creates challenges for mortgage holders, understanding where policy is heading helps with financial planning.

This article contains general information only and is not financial advice. Everyone's situation is different, so consider seeking independent advice if you're unsure about your mortgage options.

Understanding where your money goes each month is crucial when managing mortgage payments. WeMoney helps you track spending, monitor your financial health, and make informed decisions about your money.