CAB Property Wealth

It is completely understandable if you’re feeling the frustration of the recent RBA rate hike. Another 0.25% bump—taking the official cash rate to 4.10% as of March 2026—puts a very real squeeze on household budgets and shifts the landscape for anyone looking to enter or exit the property market.

Here are 5 valid, actionable points on what to do with a mortgage or property transaction right now:

1. Call your bank to negotiate (or prepare to refinance) Banks are notoriously quick to pass on that 0.25% increase to borrowers. However, there is often a "loyalty tax" where existing customers pay higher rates than new ones. Call your current lender, tell them you are feeling the pinch of the hike, and ask them to match the rates they are offering new customers. If they refuse, consult a mortgage broker to see if refinancing makes financial sense, keeping in mind that you'll need to pass the bank's "stress test" at the new, higher rates to qualify.

2. Maximize your offset or redraw facilities With interest rates climbing, the cost of carrying debt is higher. If you have emergency savings or spare cash sitting in a standard savings account (even a high-yield one), it is likely earning less interest than your mortgage is costing you after tax. Parking that money in a 100% offset account or redraw facility reduces the daily principal amount you are charged interest on, effectively blunting the impact of the rate hike without locking your cash away completely.

3. Recalculate your borrowing capacity immediately Every time the RBA raises the cash rate, banks adjust the minimum "stress test" rate they use to assess your application (typically the current rate plus a 3% buffer). This means a 0.25% hike directly shrinks your maximum borrowing capacity. If you have a pre-approval from before the mid-March hike, contact your broker or bank right away to ensure your budget hasn't dropped below the price bracket you are shopping in.

4. Leverage the cooled competition Higher rates naturally thin out the buyer pool because fewer people can secure large loans. As a buyer, you can use this to your advantage. You are less likely to face intense, emotionally driven bidding wars at auctions. Take a breath, avoid FOMO (Fear Of Missing Out), and negotiate firmly. Vendors who need to sell might be more willing to accept a sensible offer now rather than risk their property languishing on the market.

5. Price realistically and prepare for a longer campaign Because buyers are dealing with reduced borrowing power and higher monthly repayments, they are much more price-sensitive. You cannot rely on what a similar house sold for a year or two ago. You need to price your property based on the reality of today's 4.10% cash rate environment. Ensure your home is immaculately presented to stand out, be transparent with your real estate agent about your bottom line, and mentally prepare for the property to stay on the market a little longer than it might have during a boom.