Interest Rates Just Went Up — Should I Still Buy?

Interest Rates Just Went Up — Should I Still Buy?

If you’re an active buyer or first-home buyer, yesterday’s rate hike might feel like a punch in the gut. The headlines are everywhere: “RBA Hikes Again!” “Mortgage Pain Ahead.” It’s perfectly normal to feel anxious, even a bit paralysed. Should you put your property plans on hold? Or is it smarter to act before things change further? Let’s break it down, calmly and practically, so you can make the right decision for your situation.

Feeling Anxious? You’re Not Alone

Everyone is talking about interest rates — at work, family barbecues, in WhatsApp groups. The idea of borrowing more when repayments just got higher is confronting, especially if you’re stretching for your first home. If you’re feeling jittery, that’s completely natural. Big financial decisions should make you pause and think. But let’s get some perspective before you hit the brakes.

Interest Rates Rise and Fall — What History Tells Us

This isn’t the first time rates have gone up, and it won’t be the last. In my 26 years as a CPA, broker, and real estate agent, I’ve seen multiple cycles:

• Early 2000s: Rates rose steadily, and many buyers hesitated. But those who bought and held saw their property values double or more over the next decade.
• 2010-2012: Another round of increases. Again, the headlines were full of doom. Fast forward, and most properties purchased then are now worth considerably more.
• 2020-2022: Ultra-low rates created a buying frenzy. But when rates started rising, the market didn’t collapse — it simply adjusted. Well-selected properties held value, and buyers who got in before the next wave came out ahead.

The key? Time in the market beats timing the market. Waiting for the “perfect” rate or news cycle rarely works — there’s always a new headline to worry about.

The Real Maths: What Does a 0.25% Increase Mean for You?

Let’s cut through the noise. What does a typical rate rise do to your monthly repayments? Here’s the real impact (assuming principal & interest, 30-year loan):

• $600,000 loan: A 0.25% increase adds about $98/month to repayments.
• $800,000 loan: That’s roughly $130/month extra.
• $1,000,000 loan: The increase is about $162/month.

Yes, it’s real money — but it’s rarely a deal-breaker. And remember, if you’re buying in today’s market, you may be negotiating a better price than last year, potentially offsetting the higher cost of funds.

It’s not just about the rate. It’s about what fits your long-term plans and your actual cash flow.

Why Borrowing Capacity Matters More Than Just the Headline Rate

When the RBA moves rates, banks adjust their serviceability calculators. This means:

• Your maximum borrowing power may drop, even if you’re comfortable with the repayments.
• Some buyers will be priced out of certain segments, reducing competition (and possibly giving you more negotiating power).
• It’s not just your rate that matters — it’s whether you can get approved at all.

Many buyers focus on the rate headline, but the real game-changer is how much you can borrow and whether your budget still gets you the property you want. Strategy becomes more important than ever.

3 Questions to Ask Before Your Next Offer (Now That the Rules Have Changed)

I use the ASPIRE framework with all my clients. Here’s how you can apply it to your next move:

1. Affordability: What will my monthly repayments be after the rate rise, and how does this fit my current and projected cash flow?
   Use real numbers, not just the bank’s default assumptions. Factor in your actual living expenses, tax position, and any upcoming life changes (new job, family, etc.).
2. Security: Do I have a buffer in place?
   Can you absorb further increases (another 0.25–0.50%)? What’s your comfort zone for repayments? Do you have an offset or redraw facility as a safety net?
3. Plan & Priorities: Why am I buying — and what’s my real time horizon?
   Are you buying for lifestyle, location, or investment? Can you compromise on property features or location to stay within budget? Remember, “starter” homes can be stepping stones.

These three questions will help you focus on your specific circumstances, not just the latest news cycle.

What Changes When Your CPA, Broker, and Agent Sit at the Same Table?

Most buyers get fragmented advice:

• Your agent wants to close the deal, but doesn’t know your tax position or future plans.
• Your accountant understands your finances, but often doesn’t know the property market — or how lending policy is shifting in real time.
• Your broker sees numbers, but rarely has a property negotiation lens or a full picture of your tax implications.

At buyer.chat, we bring all three perspectives together, under one roof. Here’s how that changes your buying journey:

• True Property Financial Review: We model your actual cash flow, based on your income, expenses, tax deductions, and property plans — not just a generic serviceability calculator.
• Tax-aware Structuring: We factor in negative gearing, capital gains, and the impact of different ownership structures from day one.
• Live Market Intel: As active agents, we see shifts in buyer sentiment, vendor motivation, and off-market opportunities — often before they hit the public portals.
• Negotiation Leverage: We combine borrowing capacity insights with real-time property knowledge to help you negotiate smarter, not just harder.

This “triple-discipline” approach means you don’t just get a yes/no answer from a bank — you get a comprehensive strategy, tailored to your situation and the changing market.

Case Study: Sarah & David’s First Home

Sarah and David came to us last month after seeing scary headlines about interest rates. Their bank had knocked back their pre-approval. Instead of giving up, we:

• Reviewed their cash flow, including salary packaging and investment income.
• Identified extra borrowing capacity using a different lender’s policy (and a sharper rate).
• Factored in their ability to use an offset account and future tax benefits from negative gearing.
• Guided them to a suburb where the recent rate hike had softened competition — getting them a better deal on the property.

They secured their home, with confidence, despite the noise. The difference? Integrated advice, not siloed conversations.

The Bottom Line: Don’t Let Headlines Dictate Your Future

Interest rates will keep moving. The property market will keep adjusting. The only thing you can truly control is how prepared you are — and who’s in your corner.

If you’re feeling uncertain, the next step isn’t to panic, or to rush. It’s to get real, holistic advice about your unique situation.

Book a Property Financial Review with us. Let’s run the numbers — your numbers, not the bank’s or the media’s — and work out what’s possible. Whether you’re buying your first apartment or moving up the ladder, you deserve clarity and confidence, not just more headlines.

Ready to take control? Book a Property Financial Review now. Let’s put your mind at ease — and your property goals back on track.