Three rate rises in one year changes the conversation. After increasing the cash rate by 75 basis points during 2026, the Reserve Bank left it unchanged at 4.35% in August. Most lenders have passed those earlier increases through to borrowers, and the RBA says scheduled mortgage repayments are now close to their 2024 peak as a share of household disposable income.
So if your mortgage is costing noticeably more than it did at the start of the year, you’re certainly not imagining it. The question now is what you actually do about it.
Do you refinance?
Lock in a fixed rate?
Make extra repayments?
Or simply ride it out?
There isn’t one right answer, but there is a better way to make the decision
than trying to predict what the RBA will do next.
First: Stop trying to pick the top of the rate cycle
It is tempting to base your entire mortgage strategy on whether rates have peaked, but the problem is that nobody knows for certain.
In its August update, the RBA said inflation remained too high and that risks to the inflation outlook remained on the upside. Financial markets had reduced their expectations for further increases, but were still pricing some chance of another rise before the end of 2026.
You could spend the next six months trying to predict the next RBA announcement, or you could make sure your loan works at the rate you are paying today.
When refinancing makes sense
A refinance becomes worth investigating when your existing loan no longer stacks up against what is available elsewhere.
That could be because:
- Your interest rate is materially higher than comparable loans
- Your property has increased in value and your loan-to-value ratio has improved
- Your fixed period is ending
- You want an offset account or better loan features
- You have several debts that need restructuring
- Your income or financial position has improved
- You are planning another property purchase
- Your current lender is limiting your borrowing capacity
- You haven’t reviewed your mortgage in years
The RBA noted in August that despite cash-rate increases, competition between lenders remains strong. Some smaller lenders had even reduced selected advertised variable rates by around 20-30 basis points, while fixed rates had also been cut by some lenders during June and July. That doesn’t mean everyone should refinance.
It does mean the rate your lender gave you two years ago shouldn’t automatically be assumed to be competitive today.
But the rate isn’t everything
This is where borrowers can get caught. Imagine Bank A offers you a rate 0.10% lower than Bank B. On paper, Bank A wins.
But Bank B might:
- Assess your income more favourably
- Give you greater future borrowing capacity
- Offer the offset structure you need
- Allow a more useful investment-loan structure
- Be easier to deal with when you purchase again
- Have lending policies better suited to self-employed borrowers
Suddenly that 0.10% isn’t the whole decision. Particularly for property investors, the cheapest loan today may not be the lender that gives you the best position tomorrow.
What about fixing?
Fixed rates can provide certainty. You know what your repayment will be during the fixed period and you are protected if variable rates rise further. But certainty comes with trade-offs.
Fixed loans may limit:
- Extra repayments
- Redraw
- Offset functionality
- Your ability to refinance without break costs
There is also the obvious risk that variable rates fall while you remain locked in. Rather than asking whether fixed or variable is universally “better”, ask:
What problem are you trying to solve?
If repayment certainty is particularly valuable for your household, fixing some or all of the loan may be worth discussing. If flexibility matters more, variable may make more sense. A split loan can also give borrowers exposure to both.
Sometimes doing nothing is the right decision
A mortgage review doesn’t have to result in a refinance.
You may already have:
- A competitive rate
- A good offset
- A lender that suits your future plans
- Significant funds sitting against the loan
- Switching costs that outweigh the savings
If so, staying put may be exactly the right move. But there is a difference between deliberately staying with your lender and simply never checking.
Run the numbers properly
If you’re comparing loans, calculate the actual dollar outcome. For example, on a $1 million mortgage, a 0.25 percentage point rate difference is meaningful.
But you also need to consider:
- Discharge costs
- Application or valuation fees
- Government registration fees
- Package fees
- Fixed-rate break costs
- Whether you’re resetting the loan term
- Features you’re gaining or losing
Extending a loan with 22 years remaining back to 30 years may lower the minimum monthly repayment, but could increase total interest significantly if you simply make minimum repayments. The monthly repayment isn’t the only number worth looking at.
Don’t forget your broader property strategy
This becomes even more important if you intend to buy again.
A refinancing decision today can affect:
- How much equity you can access
- How another lender assesses your debts
- Your future serviceability
- Whether debt is structured cleanly between owner-occupied and investment purposes
- How easily you can move again later
That is why we tend to look at the next two or three moves, not just the loan sitting in front of us.
Our perspective
After three increases in 2026, now is a sensible time to review a mortgage. That does not automatically mean refinance.
It means that you need to understand:
- What you’re paying.
- What else is available.
- What it would cost to move.
- What your next financial move is likely to be.
Then make the decision from there. Trying to perfectly predict the next rate move isn’t a strategy. Having a loan that still works whether the RBA moves up, down or nowhere at all is.
