RBA Warns Inflation May Stay Higher for Longer

September 28, 2026

RBA Decision Due Tomorrow: What Higher Inflation Risks Could Mean for Your Home Loan

The RBA interest-rate decision is just a day away, and borrowers are watching closely. With the decision due at 2:30pm AEST tomorrow, the question is no longer what markets expect, but what the Board actually decides.

Speaking to a parliamentary committee in Canberra on 18 September, RBA Governor Michele Bullock said developments since the August meeting suggest that some of the upside risks to inflation identified by the RBA appear to be materializing.

Source

What’s actually happening with inflation right now

The numbers back her up. According to the Australian Bureau of Statistics, headline inflation eased to 3.5 per cent in the 12 months to July 2026, while trimmed mean inflation remained at 3.6 per cent. Both measures remain above the RBA’s 2–3% target range.

That helps explain why the Board remains focused on bringing inflation sustainably back to target and is still assessing whether the tightening already delivered will be enough.

This comes on top of a run of hikes already. The RBA has lifted the official cash rate three times in 2026, taking it to 4.35 per cent. The Bank has made clear that inflation remains too high and that future decisions will depend on whether current policy settings are sufficient to return inflation sustainably to target.

The RBA decision is just a day away

The Monetary Policy Board has been meeting across 28–29 September, with its decision scheduled for 2:30pm AEST tomorrow.

At the time of writing, financial markets are pricing in a high probability of another rate increase. Reuters reported on 22 September that markets were pricing around a 95% chance of a 25-basis-point rise at the September meeting. Market pricing can change quickly, and this remains an expectation rather than an RBA decision.

Governor Bullock has also stressed that she is not signalling the Board’s next move or pre-committing to an outcome.

That makes the next few hours a useful time for borrowers to focus less on predicting the announcement and more on understanding how their own finances could respond to either outcome.

What this means if you’ve got a mortgage (or you’re about to get one)

Prepare, don’t panic. Rate speculation causes a lot of noise. The best move isn’t to react to headlines; it’s to understand exactly where your loan and your budget stand, so you’re ready no matter what the Board decides.

Give your loan a check-up. If rates do stay higher for longer, it’s a good time to look at whether your current loan structure, repayments and features still work for you. A loan that suited your circumstances two years ago may not suit them in the same way today.

Remember, the interest rate is only one part of the comparison. Fees, features, flexibility and loan structure can also affect whether a loan suits your circumstances.

Know your real borrowing power. Higher interest rates can reduce borrowing capacity because lenders assess whether you can service repayments at rates above the actual loan rate. If you’re planning to buy, it’s worth getting a proper read on your borrowing capacity before you fall in love with a property.

What you can check before the announcement

You don’t need to predict the RBA’s decision to get clearer on your own position. Before tomorrow’s announcement, consider asking:

What would another rate increase mean for my monthly repayments?
Does my current home loan structure still suit how I use the loan?
How much repayment buffer do I have if rates remain elevated?
If I’m planning to buy, what does my current borrowing capacity realistically support?
Would refinancing improve my position once rates, fees, features and switching costs are considered together?

Whatever the Board announces this afternoon, these are useful questions to have answered before making your next move.

Ready to make your move?

For personalised guidance or to review your current borrowing position, get in touch with the team at Safehaven Finance. Call us on 0433 564 936 or book a free consultation online, and we’ll help you understand your current loan position, borrowing options, and what today’s RBA decision could mean for your circumstances once the outcome is known.