The RBA shouldn’t punish Australian mortgagors with another rate hike – that’s the message from Compare the Market‘s Economic Director David Koch who says households already have it hard enough with pricing pressure at the petrol pump and grocery store.
Kochie warns another rate hike could tip many households over the edge.
“Australian households are doing it tough,” Mr Koch said. “Yes, inflation is going up, but that’s not because of consumers spending too much. It’s things outside of their control like petrol prices going up because of the conflict in the Middle East.
“Essentially they’re getting another rate hike when they go to fill up the car.
“Maybe Michele Bullock could have a word to the Treasurer instead and say, ‘hey mate, will you cut spending and reduce demand and give us a bit of help with inflation that way?’”
The RBA has already raised the cash rate three times in 2026, lifting rates by 0.25% in February, March and May, before holding steady in June. The rate currently sits at 4.35%.
Someone with an average loan size of $735,000 could see their monthly repayments increase by around $120 a month if the RBA lifts rates by 0.25%. That’s in addition to the three 0.25% increases already in 2026.
Impact of a potential rate rise on Australian mortgage repayments
| Loan size | Monthly impact of a 0.25% rate increase | Monthly impact of x2 0.25% rate increases (0.50%) | Monthly impact of x3 0.25% rate increases (0.75%) | Monthly impact of x4 0.25% rate increases (1%) |
| $500,000 | $81 | $164 | $247 | $331 |
| $600,000 | $98 | $196 | $296 | $397 |
| $750,000 | $122 | $246 | $370 | $496 |
| $900,000 | $146 | $295 | $444 | $596 |
| $1,000,000 | $163 | $327 | $494 | $662 |
| *Calculations assume an owner-occupied loan with a variable interest rate of 6.15% that is increased by 0.25% a month. It assumes a 30-year loan term, with no ongoing fees. This does not take into account the reduction of the loan balance over time. | ||||
Kochie expects the RBA to hold in August, but says households should not assume the pressure is over.
“Some economists still see another rate rise before the end of the year. But families are already being hit from all sides, and another hike would only add to the squeeze,” Mr Koch said.
“Australians aren’t driving inflation because they’re splashing cash or living it up. Global fuel shocks and government spending are adding to demand, but mortgage holders are the ones being asked to cop the pain.
“Consumers have gone into the bunker. They’re cutting back wherever they can, but many of the biggest cost increases hitting household budgets are completely beyond their control.”
Mr Koch said homeowners should still continue looking for opportunities to reduce household costs and regularly review their finances to ensure they’re not paying more than necessary. It could be a necessity for many if the RBA does decide to hike interest rates again.
Kochie’s top tips to help households manage rising costs
- Review your mortgage regularly: Even a small reduction in your interest rate could translate into significant savings over the life of your loan. If your current bank can’t match cheaper offers available on the market, be prepared to walk.
- Shop around for essential services: Compare providers for insurance, energy and telecommunications to make sure you’re still getting value for money. Loyalty rarely pays when it comes to these costs and better deals are often reserved for new customers.
- Plan fuel purchases strategically: Before filling up, ensure you’re using fuel comparison apps to track down cheaper fuel and take advantage of any discounts available through supermarkets, insurance providers, telcos and energy retailers.
- Audit household spending: Regularly reviewing subscriptions, memberships and recurring expenses may uncover savings opportunities.
- Build a financial buffer where possible: Setting aside even a small amount each pay cycle can provide breathing room when unexpected expenses arise.
