Interest Rates in 2026: What Every Queensland Home Buyer and Investor Should Watch
By Tim AllenBuyer’s Agent and Director, IPS Buyer’s Agents
Interest rates are the single biggest lever on what you can borrow, what you repay and, ultimately, what property prices do. In 2025 the Reserve Bank of Australia cut rates three times. In 2026 it has reversed course, raising the cash rate four times to 4.60%. If you are buying a home or investment property in Queensland, keeping an eye on interest rates has never mattered more.
This guide explains where rates are now, why they rose, how they affect your repayments and borrowing capacity, and the practical steps buyers and investors can take in 2026.
First published November 2023 and fully updated October 2026. This is general information, not financial advice: speak to your mortgage broker or adviser about your situation.
Where interest rates are in 2026
The cash rate is set by the Reserve Bank’s Monetary Policy Board, which meets eight times a year. Lenders largely pass its moves on to variable home loan rates. Here is how the cash rate has moved over the past two years:
| Period | Move | Cash rate |
| Start of 2025 | - | 4.35% |
| 2025 | Three cuts (75 basis points) | 3.60% |
| February 2026 | Rise of 0.25% | 3.85% |
| March 2026 | Rise of 0.25% | 4.10% |
| May 2026 | Rise of 0.25% | 4.35% |
| August 2026 | No change | 4.35% |
| 29 September 2026 | Rise of 0.25% | 4.60% |
The September decision was unanimous, and the Board said it would do what it considers necessary to bring inflation back to target, including raising rates again if needed. The next decision is due on 3 November 2026, and economists are divided between another rise and a pause.
A short history of interest rates since 2020
To put 2026 in context: the cash rate was cut to a record low of 0.10% in late 2020, and many buyers borrowed at fixed rates below 2%. From May 2022 the Reserve Bank raised rates 13 times to 4.35% by November 2023, the fastest tightening in a generation. Rates then held until 2025, when three cuts took the cash rate to 3.60%. The four rises of 2026 have taken it back above its 2023 peak, to 4.60%.
The lesson for buyers is that rates move in cycles, and the low rates of 2020–21 were the exception, not the norm. A home loan you can afford at 7% or more is one you can hold through the cycle.
The Reserve Bank’s job is to keep inflation within a 2–3% target band. In 2026, inflation stopped falling. The bank’s preferred measure, trimmed mean inflation, was 3.6% over the year to the June quarter, and higher energy costs added to the pressure. When inflation stays above target, the bank raises the cash rate to slow spending across the economy.
For property buyers, the key point is that rates follow inflation. The quarterly Consumer Price Index from the Australian Bureau of Statistics, and the monthly inflation indicator in between, are the best early warning of where rates are heading next.
On a variable loan, every rate rise flows straight through to your repayments. As a rough guide, on a $600,000 principal-and-interest loan over 30 years:
- each 0.25% rise adds roughly $95–$100 a month to repayments;
- a 1 percentage point rise (for example from 5.6% to 6.6%) adds roughly $390 a month, or more than $4,600 a year.
These are illustrations only: your actual figures depend on your rate, loan size and term. Moneysmart’s free mortgage calculator lets you test your own numbers.
Here is how the monthly repayment on the same $600,000 loan changes across a range of interest rates (principal and interest, 30 years, rounded):
| Interest rate | Monthly repayment | Yearly repayments |
| 5.5% | about $3,407 | about $40,880 |
| 6.0% | about $3,597 | about $43,170 |
| 6.5% | about $3,792 | about $45,510 |
| 7.0% | about $3,992 | about $47,900 |
A 1.5 percentage point swing, roughly the gap between the low point of 2025 and a further rise or two from today, is worth around $7,000 a year on this loan.
Rate rises hit borrowing capacity even harder than repayments. Lenders do not assess your loan at today’s rate. Under APRA’s guidance they test whether you could still afford it at about 3 percentage points higher. So when actual rates rise by 1%, the assessment rate rises too, and the maximum loan a bank will approve falls, often by tens of thousands of dollars for an average household.
Since 1 February 2026, APRA has also capped high debt-to-income lending: banks can write only a limited share of new loans at six times the borrower’s income or more. Most buyers are not affected, but investors with large existing portfolios may find lenders more cautious.
This is the main reason Brisbane’s property market has cooled in 2026. When every buyer can borrow a little less, prices adjust. Our 2026 update on Brisbane home values covers what that has meant for prices so far.
When rates rise, the pool of money buyers can bring to the market shrinks, and prices tend to adjust. That is exactly what Brisbane has seen in 2026: values peaked in May, after the third rate rise of the year, and fell through winter. When rates fall, the opposite happens, as 2025 showed. But rates are not the only driver. Population growth, rental vacancy and the supply of new homes all matter, which is why Brisbane’s falls have so far been moderate compared with the size of the earlier boom.
The practical lesson: a period of rising rates is often when buyers have the most negotiating power. If your finances are secure and you plan to hold for the long term, a softer market can be a good time to buy.
Two simple tools can blunt the impact of higher rates. An offset account reduces the interest you pay by offsetting your savings against the loan balance, while keeping the money accessible. Extra repayments on a variable loan reduce the balance faster and shorten the loan term. Even modest regular extra payments made while rates are lower build a buffer for when they rise.
- Variable rates move with the cash rate. You benefit immediately when rates fall, and usually get features like offset accounts and unlimited extra repayments.
- Fixed rates give certainty for one to five years. Lenders price fixed rates on where they expect rates to go, so when further rises are expected, fixed rates may already be higher than variable.
- Split loans fix part of the loan and leave the rest variable, balancing certainty with flexibility. Our guide to the split loan strategy explains how it works.
There is no universally right answer. The best choice depends on your cash flow, how long you plan to hold the property, and how much uncertainty you can live with.
For investors, rates affect both cash flow and tax. Higher rates increase holding costs, which matters more now that the 2026 Federal Budget will limit negative gearing for established properties bought after 12 May 2026 (from 1 July 2027). Our explainer on the 2026 negative gearing and CGT changes covers the details, and our guide to the five types of property gearing shows how rates change the numbers.
The good news for investors in South East Queensland is that rents are still rising. With vacancy rates below 1% across much of the region and Brisbane house rents up around 6–7% a year in mid-2026, rental income is helping to offset higher repayments.
- Stay informed. Follow the RBA’s decisions and the ABS inflation releases, and read the bank’s statements for hints about the next move.
- Build a buffer. Aim to hold several months of repayments in an offset or redraw account. A buffer turns a rate rise from a crisis into an inconvenience.
- Refresh your pre-approval. If your pre-approval was issued before the latest rise, ask your broker to reassess it before you bid or make an offer.
- Review your loan every year. Loyalty rarely pays. A broker can check whether your rate is still competitive or whether refinancing makes sense.
- Buy quality. In a rising-rate market, well-located homes with broad appeal hold their value best. Our article on recognising an investment-grade property explains what to look for.
- Use your negotiating power. Higher rates mean fewer competing buyers. That gives prepared buyers more room on price and conditions.
First home buyers usually feel rate rises most, because they borrow the highest share of the purchase price. But 2026 also brings advantages: more homes to choose from, less competition, and government support through the 5% Deposit Scheme, Help to Buy, Queensland’s $30,000 grant for new homes and transfer duty concessions. Our guide to buying your first home in 2026 explains how to prepare.
- How much can I borrow at today’s rates, and how much would that change after another 0.25% rise?
- Is my pre-approval still valid after the latest rate rise?
- Would a split loan, offset account or redraw suit my situation?
- Which lenders are offering the sharpest rates and policies for my circumstances?
- What would my repayments be if rates rose by another 1%?
- Quarterly CPI releases: the biggest influence on the RBA’s decisions.
- RBA meetings and statements: including the November 2026 Statement on Monetary Policy.
- Unemployment: a weakening jobs market would make further rises less likely.
- Bank forecasts: the big four banks update their cash rate forecasts regularly, and they often disagree.
- Auction clearance rates and listings: a quick read on how buyers are responding to rates in your area.
Interest rates affect every part of a purchase, so it pays to have a team that works together. A good mortgage broker can compare lenders, structure your loan and keep your pre-approval current. Our finance partners at Moreton Bay Finance Broker work alongside us on many purchases. A buyer’s agent makes sure you pay the right price for the right property in a shifting market.
If you would like help understanding how 2026’s rate rises affect your buying plans, talk to IPS Buyer’s Agents. You can also try our property calculators to model your purchase.
What is the current RBA cash rate?
The cash rate is 4.60% after the Reserve Bank raised it by 0.25% on 29 September 2026, its fourth increase of the year.
Will interest rates go up again in 2026?
Possibly. The Reserve Bank has said it will raise rates further if needed to bring inflation back to target. Economists are divided on its 3 November 2026 decision.
How much does a 0.25% rate rise add to repayments?
On a $600,000 principal-and-interest loan over 30 years, each 0.25% rise adds roughly $95 to $100 a month.
How do higher rates affect borrowing capacity?
Lenders assess loans at about 3 percentage points above the actual rate, so each rise reduces the maximum amount a bank will lend.
Should I fix my home loan in 2026?
It depends on your cash flow and plans. Fixed rates give certainty but may already price in expected rises; variable rates offer flexibility and features such as offset accounts. A split loan combines both. Talk to your mortgage broker.