Australian Mortgage Stress Ahead of an RBA Decision: What Borrowers Should Check

This article is provided for general information only and does not constitute personal financial advice; important borrowing decisions should be discussed with a licensed professional such as a mortgage broker or financial adviser.

The RBA decision on the horizon

The Reserve Bank of Australia’s next cash rate announcement is scheduled for 2.30pm on 29 September 2026. The cash rate target was last set on 12 August 2026. Markets and major bank commentary widely expect a 0.25 per cent increase. If that move lands, the official cash rate would reach 4.6 per cent, the highest reading since the RBA’s 4.75 per cent peak in 2010, before the decade of cuts that followed.

It is worth separating two ideas: a survey pointing to more than a million mortgages potentially at risk is a sentiment and exposure estimate, not a confirmed policy outcome. The RBA has signalled that further hikes remain on the table, but the exact size and timing of any move are decided at the board meeting.

What the Money.com.au survey actually found

An exclusive survey by Money.com.au, reported on 28 September 2026, revealed 39 per cent of mortgage holders were not confident they could continue affording home loan repayments if interest rates rose again.

The selling-pressure thresholds were stark. Nine per cent of homeowners said a 0.25 per cent rise would force them to seriously consider selling. A further 15 per cent said a full percentage point, or four hikes, would be the trigger.

Money.com.au mortgage spokesman Nick Burgess called the findings “alarming”, noting the buffer for many households is “incredibly thin”. More than one million mortgages may be at risk if rate pressure builds. The survey also found close to two-thirds of Australians would prefer house prices to keep falling, against 36 per cent who want them to rise; 83 per cent of renters and 53 per cent of homeowners wanted prices to fall.

How to check your own repayment exposure

You do not need to wait for the RBA to know your position. A mortgage calculator lets you model the effect of a higher or lower interest rate on your repayments before committing to any decision.

As a reference point from earlier RBA moves, a borrower with an average-sized new mortgage of $736,000 at a 5.7 per cent rate saw about $117 added to monthly repayments for a 0.25 per cent increase, though individual lenders decide how much of any hike to pass on, so check with your own lender for an exact figure.

Refinancing and buffering options

If a higher-rate environment looks likely to persist, reviewing your loan makes sense. Variable home loan rates on the market can differ by more than 2 per cent, so checking competitors periodically is worthwhile. Refinancing to a lower rate might save money, but weigh the benefits against the costs before switching.

Before refinancing, check discharge fees, whether lender’s mortgage insurance applies, any internal refinance fee charged by your current lender, and the length of the new loan so you do not extend your term. A mortgage switching calculator can show whether you would actually save and how long it takes to recover switching costs. An offset account can reduce the interest you pay by offsetting savings against your loan balance, another option worth understanding.

Support if repayments become unmanageable

If repayments slip out of reach, act early. All lenders maintain hardship teams, and you can request a hardship variation to temporarily pause or reduce repayments. Your lender must respond to a hardship request in writing within 21 days, or within 21 days of any extra information you provide. If a request is refused, the lender must give reasons, and you can escalate to its internal dispute resolution team and then to the Australian Financial Complaints Authority (AFCA), the free and independent external scheme.

In Western Australia, Legal Aid WA notes mortgage stress can affect anyone and offers a Mortgage Hardship Service and self-help guide; a “hardship notice” is your right to request a variation for reasonable cause such as illness or unemployment. Selling voluntarily is generally better than a lender taking possession, as you are likely to get a better price and avoid the lender’s legal costs.

Borrower questions answered

When is the next RBA decision and what is the cash rate target?

The next cash rate announcement is at 2.30pm on 29 September 2026, with the target last set on 12 August 2026. The RBA is widely expected to raise by 0.25 per cent to 4.6 per cent, the highest since the 4.75 per cent peak in 2010.

What does refinancing involve and what should I check?

Refinancing to a lower rate can save money, but check discharge fees, lender’s mortgage insurance, internal refinance fees and the new loan term; variable rates can differ by more than 2 per cent, and a switching calculator shows whether you save.

What help is available if I struggle with repayments?

All lenders have hardship teams and must respond to a hardship request within 21 days; if refused you can escalate to AFCA. Western Australia residents can access Legal Aid’s Mortgage Hardship Service.

How high would a 0.25 per cent hike take the cash rate historically?

A 0.25 per cent rise would take the cash rate to 4.6 per cent, the highest since the 4.75 per cent peak in 2010.

Source notes

Figures and survey results are drawn from realestate.com.au (28 September 2026, reporting an exclusive Money.com.au survey); the Reserve Bank of Australia cash rate target page (23 September 2026) and its published 2026 Monetary Policy Board meeting calendar (10 February 2025); Moneysmart’s mortgage calculator, switching home loans and problems-paying-your-mortgage guidance (June to September 2026); the Guardian’s repayment calculator explainer (5 May 2026); ABC News’ rate-hike repayment explainer (5 May 2026); and Legal Aid WA’s financial hardship and mortgage stress guidance.