While the nation stopped for the Melbourne Cup today, the Reserve Bank delivered their own Cup Day announcement. At 2:30pm it lifted the cash rate 0.25% to 4.85%. It’s the fifth rise this year and the highest cash rate since 2008, and for many Northern Beaches homeowners it’s a far bigger hit than any losing ticket.
With most Northern Beaches house prices sitting well above $2 million, a $1 million to $1.5 million mortgage is common here. On a typical variable loan, today’s rise alone adds about $165 to $250 a month. Since January, that same household is paying roughly $800 to $1,200 more every month, or $10,000 to $14,500 a year.
What it means for your repayments
| Loan | Today’s rise | Since January |
|---|---|---|
| $800,000 | +$132/month | +$646/month |
| $1,000,000 | +$165/month | +$808/month |
| $1,250,000 | +$207/month | +$1,010/month |
| $1,500,000 | +$248/month | +$1,212/month |
Why the RBA moved
The RBA said inflation remains elevated and broadly based, pushed along by higher fuel prices linked to the Middle East conflict. It now expects inflation to stay high through much of 2027. The board was split 6 to 3, so this wasn’t a unanimous call, and some economists see a risk of another rise in December or February.
What to do now
– Check your new repayment. Confirm your lender has passed on the rise and when it takes effect.
– Ask for a better rate. Loyalty rarely pays. A quick call to your lender or broker can save hundreds a year.
– Make your offset work harder. Every dollar sitting in an offset saves interest at your loan rate.
– Investors: review your loan structure. Interest on an investment loan is generally deductible; interest on your home loan isn’t. Getting the structure right matters more as rates rise.
– Rework your budget. Plan for the possibility of another rise in early 2027.
Not sure where you stand? Talk to us and we’ll run the numbers with you. Call 02 9045 1511 or get in touch.
This article is general information only and doesn’t take your personal circumstances into account.
