Key takeaways
Banks lifting fixed-rate home loans, after months of cuts, suggests that lenders no longer expect further RBA rate reductions and may even be preparing for the possibility of future hikes.
A hotter-than-expected inflation reading pushed the RBA to hold the cash rate, prompting banks to revise their forecasts and reposition their fixed-rate pricing.
With inflation still outside the RBA’s target band and unemployment softening overseas, Australia faces a period where the next rate move will delayed longer than anticipated or may even be up.
High migration, tight rental markets, and restricted supply continue to support prices, favouring investors who maintain buffers, plan for multiple scenarios, and stay focused on long-term growth rather than short-term noise.
Every so often, the property market sends a subtle signal before the headlines catch up.
And right now, we’re seeing one of those signals flashing.
Investors who are watching fixed-rate pricing trends, rather than waiting for the next RBA board meeting, may already have an early warning of where the next phase of the interest rate cycle is heading.
Banks have quietly begun nudging up their fixed-rate home loan products, and that’s unusual at this stage of the cycle.
Only weeks ago lenders were trimming fixed rates in anticipation of future cuts.
Today, that narrative has shifted sharply.
So what’s changed? And more importantly, what does it mean for property investors, homeowners, and anyone structuring their finance for the next stage of the market?
A turning point in rate expectations
The catalyst was the latest inflation reading.
Annual inflation running hotter than expected forced the RBA to keep the cash rate on hold at the last meeting.
Note: While the RBA's decision to keep rates on hold wasn’t surprising, the reaction from the banks has been.
Up until recently, the major banks were pencilling in a series of rate cuts through 2024 and 2025. That expectation drove a wave of fixed-rate reductions across the lending landscape.
But that optimism evaporated quickly.
Within days of the inflation data, Australia’s major lenders revised their forecasts, and some have now publicly stated they no longer expect further cuts. That’s a dramatic shift.
If fixed rates are rising before the RBA has moved, it’s usually because lenders see the winds changing.
What the Banks are seeing
Banks don’t raise fixed rates on a whim. These products are priced based on the cost of wholesale funding and expectations of where the cash rate will sit during the fixed period.
When fixed rates rise:
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Lenders may believe the next RBA move could be up, not down
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Or at the very least, that the current rate may hang around longer than previously thought
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And they want to protect themselves from locking in cheap money if funding costs rise later
We’ve now seen multiple major lenders lift selected fixed products by up to 0.35%.
In industry terms, that’s a meaningful jump, especially in a market that had been trending in the opposite direction.
This is why investors need to pay attention.
Fixed-rate movements often change months before the actual cash rate turns.
Could rate hikes really happen next year?
While I don't think that is likely, the possibility can’t be dismissed.
Inflation remains outside the RBA’s 2–3% target band, and any acceleration, even a temporary one, would put upward pressure on policy decisions.
If annual inflation pushes toward 4% again, that could be enough to trigger a tightening move.
But it’s not just inflation that matters.
The RBA is juggling two mandates:
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Keep inflation under control
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Support employment
If unemployment begins to deteriorate noticeably, something the US is already grappling with, the RBA could be forced into an uncomfortable trade-off: cut rates to support jobs, even if inflation is still too high.
- Also read:The RBA Won’t Like This… New Jobs Surge Turns Rate-Cut Hopes Upside Down | Property Insiders
- Also read:Adelaide housing market update | November 2025
- Also read:Sydney housing market update | November 2025
- Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To For Prices With Rate Cuts Delayed.
- Also read:Brisbane housing market update | November 2025
Make no mistake: we’re in a uniquely uncertain phase where both outcomes are plausible.
The new reality for borrowers and investors
This shifting landscape has important implications:
1. Fixed rates are no longer a “set and forget” bargain
Investors tempted to lock in a fixed rate should approach with more sophistication.
Comparison rates matter more than ever, they reveal the true cost once fees and conditions are factored in.
2. Variable rates may offer more flexibility
If the rate cycle is at or near its floor, fixing now could mean locking in prematurely.
A variable rate, or a smart blend, keeps options open.
3. Splitting loans is becoming more attractive
A “hedge your bets” structure can reduce risk.
Savvy investors have always known that finance strategy should evolve with market conditions, not follow a one-size-fits-all rule.
4. Cashflow buffers remain essential
Even if we don’t see rate hikes, the mere possibility means investors should strengthen buffers, review cashflow assumptions, and avoid aggressive borrowing.
What this means for the property market
Here’s the strategic lens I think matters most for property investors:
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We’re not heading back to ultra-cheap money. That chapter closed with the pandemic-era stimulus.
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We’re likely near the bottom of this rate cycle. The next major move is more likely to be up than down — or at the very least, a longer period of stability.
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Demand-side pressures remain strong. High migration, tight rental markets, and limited supply continue to underpin property values despite higher borrowing costs.
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Well-located investment-grade properties will keep outperforming. Investors with strong buffers and long-term strategies won’t be derailed by short-term rate uncertainty.
In other words, the macro may be wobbling, but the fundamentals remain.
So, where does this leave you?
It leaves you needing to be more strategic, more forward-thinking and more agile with your finance decisions than at any point since the pandemic.
If you’re considering fixing your rates, refinancing, or restructuring your portfolio, the key is not to act out of fear, but to act with clarity.
This environment rewards investors who:
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Understand the cycle
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Plan for multiple scenarios
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Optimise their finance structure rather than set-and-forget
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Focus on long-term growth drivers, not short-term headlines
Like every shift in the cycle, this is not a reason to panic, it’s a reason to plan.
And if you want a second set of eyes on your borrowing strategy, your buffers, and your property portfolio, now’s a smart time to review the numbers before the next move in the cycle reveals itself.
