RBA Raises the Cash Rate: What It Means for Your Building Plans

On Tuesday 29 September, the Reserve Bank of Australia lifted the cash rate by 0.25 percentage points to 4.60%, as inflation remains stubborn. It wasn't quite the spring update borrowers were hoping for, and if you're preparing to buy land or start building, it may raise a few questions.

According to Mark Polatkesen, Managing Director at Mortgage Domayne, the key now is to understand what the change means for your own situation.

“Every client’s position is different, so the useful conversation now is what any change in their lending rate means for their budget, borrowing capacity and plans.”

What the rate rise means for borrowers

The impact depends on your lender and loan type. If you have a variable-rate loan, your lender may increase your interest rate, which could lead to higher repayments. Each lender decides whether to pass on the increase and when it takes effect.

Mark suggests keeping an eye on announcements from your lender and, importantly, looking at what any increase means for your own numbers.

A good time to review your plans

A rate rise doesn't necessarily mean your plans need to change. It's about understanding your position before you take the next step, particularly if you're approaching land settlement or finalising your building plans.

“Reviewing their borrowing position, expected repayments and available cash buffer can help identify whether their budget needs adjusting before they take the next step,” says Mark.

Knowing your numbers upfront gives you a clearer picture of what's achievable, and what repayments may look like as rates change.

Your next step

There's no one-size-fits-all answer. Whether you're planning to buy land, start building or are already mid-construction, Mortgage Domayne can work through the numbers with you, explain your options and help you move forward with a clearer picture.