With more rate hikes likely, what should borrowers do now?
Interest rate expectations remain uncertain, with forecasts pointing to further increases into 2026. The Reserve Bank of Australia has already lifted the cash rate to 4.1%, adding around $100 per month to repayments on a $600,000 loan.
Major banks, including Westpac, are signalling further hikes are possible, meaning borrowing costs could stay elevated for longer than many anticipated. This raises an important question for borrowers: Is your loan still working as hard as it should be?
What is driving the outlook?
Inflation remains persistent, with the Consumer Price Index rising more than 20% since 2020, keeping pressure on the Reserve Bank of Australia to act. At the same time, global tensions, including conflict in the Middle East, are adding further volatility to energy prices and the broader economy.
Meanwhile, property values have continued to rise in around 70% of suburbs – making this environment difficult to read, and why many borrowers are turning to a broker to help them make sense of it.
Fixed vs variable: weighing up your options
Against this backdrop, many borrowers are reassessing how their loans are structured.
Fixed rates can provide certainty, helping to protect against further increases. That stability often comes with trade-offs, including higher rates, limited flexibility and potential break costs.
Variable rates offer more flexibility and the ability to benefit if rates eventually fall, but repayments can increase if further hikes occur.
Splitting a loan between fixed and variable is one way to manage this uncertainty, giving borrowers a level of protection while retaining some flexibility. It also reflects a broader movement towards more considered loan structuring in the current environment.
This is where a broker can add real value. Rather than choosing between options in isolation, a broker can compare products across multiple lenders, model different rate scenarios, and show how each structure impacts your repayments, cash flow and long-term strategy.
Why reviewing your loan matters now
Many mortgage holders are choosing to adjust their loans with their existing lender rather than switch, with loan upgrades rising 12.6% year-on-year compared to 6.9% growth in refinancing to a new lender. The focus is clearly on maintaining control in an uncertain environment.
Reviewing a home loan now does not mean making immediate changes. It means understanding where you stand, how your loan is structured, and what options are available before conditions shift further.
A broker can guide this process by benchmarking your current loan against the market, negotiating with your existing lender, and identifying whether refinancing or restructuring could put you in a stronger position.
Once you understand your position, the next step is considering how to respond.
Practical steps to consider
Taking a measured approach can make a significant difference. Here is where to start – ideally with a broker who can assess each step in the context of your circumstances:
Review your current interest rate, repayments and loan structure – you may be paying more than you need to
Compare options across lenders, including those you may not have considered or had access to on your own
Consider whether splitting your loan makes sense for your situation and risk tolerance
Take the time to make a considered decision, rather than reacting to the latest news cycle
A broker can work through each of these with you, helping prioritise what matters most for your circumstances.
Focus on what matters to you
Even with these steps, uncertainty in the market can make timing decisions difficult, but individual circumstances remain the most important factor. The right time to act ultimately comes down to what is affordable and appropriate for you.
A broker’s role is to bring clarity to that decision, so you can act with confidence rather than reacting to market noise.
Getting ahead of potential rate changes starts with understanding where you stand today. Eventus Financial is an award-winning Sydney mortgage broker with over 400 five-star Google reviews. Schedule a no-obligation consultation with Alex to see what’s possible for your situation.