RBA Cash Rate Update Feb 2026
What the decision Means for First Home Buyers, Homeowners and Investors
Read the full statement here.
How This Affects Mortgage Holders
For homeowners with a variable-rate home loan, the decision means there will be a change to monthly repayments as a direct result of the RBA announcement.
Many borrowers are still adjusting to the significant repayment increases experienced over the past two years and this comes as another blow to affordability
Now may be a good time to:
- Review your home loan interest rate.
- Compare your rate against current market offerings.
- Consider refinancing if your lender is no longer competitive.
- Assess whether extra repayments could help reduce future interest costs.
Many lenders are actively competing for quality borrowers, and refinancing opportunities still exist for suitable applicants.
Impact on First Home Buyers
The increase in rate add more uncertainty for first-home buyers who have been waiting for greater certainty before entering the market.
Rising interest rates will mean First Home Buyers will need more help:
- Better understand their borrowing capacity.
- Budget with greater confidence.
- Navigate property searches without the fear of immediate rate increases.
That said, affordability remains a challenge across many Australian property markets. Buyers should focus on building a strong savings history, reducing unnecessary debt and obtaining pre-approval before actively searching for a property.
A stable rate environment can create opportunities, particularly for buyers who are well prepared and ready to act when suitable properties become available.
Impact on Property Investors
Investors are continuing to adapt to higher borrowing costs, but many remain active due to strong rental demand and low vacancy rates across much of Australia.
This increase in interest rates will add greater certainty and pressure around investment cash flow planning.
Property investors should consider:
- Current rental yield performance.
- Potential future interest rate movements.
- Tax implications and investment structures.
- Long-term capital growth opportunities.
For many investors, securing the right property with strong fundamentals remains more important than attempting to perfectly time the interest rate cycle.
Will Banks Pass on the Change?
Yes, Lenders will start to adjust variable home loan rates immediately.
However, banks do not always move rates solely in response to RBA decisions. Funding costs, competition and broader economic conditions can all influence pricing.
This means some lenders may still introduce:
- New customer discounts.
- Cashback or refinance promotions.
- Changes to fixed-rate products.
- Special offers for owner-occupiers or investors.
It is worth reviewing your loan regularly to ensure you are still receiving a competitive rate.
Borrowing Capacity Example
Interest rates play a major role in determining how much a borrower may be able to borrow.
As a simple example:
A couple earning a combined income of $180,000 per year with minimal existing debts may be able to borrow around the same amount as they could last month because the cash rate has remained unchanged.
If future rate cuts occur, borrowing capacity may improve. Even a reduction of 0.25% can potentially increase borrowing power by tens of thousands of dollars, depending on the applicant’s circumstances.
Every lender assesses borrowing capacity differently, so obtaining personalised advice is important.
My Outlook for the Next 6 Months
The RBA appears focused on balancing two priorities:
- Bringing inflation back within its target range.
- Avoiding unnecessary pressure on households and businesses.
If inflation continues to moderate and economic growth remains subdued, the conversation may gradually shift towards future rate reductions. However, the RBA has repeatedly emphasised that decisions will remain data dependent.
For borrowers, this means there may be opportunities ahead, but it would be unwise to assume rate cuts are guaranteed or imminent.
The best approach is to remain financially prepared, maintain a healthy buffer and review your lending strategy regularly.
Frequently Asked Questions
Will my mortgage repayments change after this announcement?
Yes. Since the RBA raised the cash rate, most borrowers should expect notification of repayment changes as a result of the decision.
Should I refinance now or wait?
This depends on your current interest rate, loan features and financial goals. Many borrowers can benefit from reviewing their loan even when the cash rate remains unchanged.
Will borrowing capacity improve if rates fall?
Generally, lower interest rates can increase borrowing capacity, although lender policies and serviceability assessments also play an important role.
Is now a good time to buy property?
The right time to buy is when your finances, goals and circumstances align. Interest rates are only one factor in the property purchasing decision.
How often does the RBA meet?
The RBA Board generally meets throughout the year to assess economic conditions and determine whether changes to the cash rate are required.
Q: How often should I review my home loan?
At least once per year. Market conditions change, new loan products become available, and your personal situation may change. An annual review ensures you’re always getting a good deal.
Why Work with Awesome Lending Solutions?
We make it easy to save money on your home loan, whether rates go up, down, or stay on hold.
What we do for you:
- ✅ Compare rates from over 60 lenders
- ✅ Negotiate better rates with your current lender
- ✅ Handle all refinancing paperwork
- ✅ Find loans with the features you need
- ✅ Provide free rate reduction letters
- ✅ Keep you updated on RBA rate decisions
- ✅ Act in your best interests (required by law)
Our service is free for most home loan customers. We’re paid by the lenders, not by you, so there’s no cost to get expert help.
