What This Week's RBA Minutes Mean for Your Mortgage

The Reserve Bank released the minutes from its late September meeting this week, and they confirm something worth sitting with before the next decision on 3 November. The board is not promising a pause. On the same day, new figures on housing affordability showed Australian households are now paying close to the highest share of their income on a mortgage ever recorded. The two stories are connected, and if you are budgeting for your own repayments right now, both are worth understanding properly rather than through a headline.

What the Reserve Bank actually said

Back on 29 September, the board raised the cash rate by 0.25 percentage points to 4.60 per cent, the fourth rise this year. The minutes released this week show the board briefly discussed holding instead. Members weighed up real concerns: falling house prices could weigh more heavily on household spending than expected, conflict in the Middle East could hurt confidence, and earlier rate rises might still be working their way through the economy.

In the end, the board judged that inflation remained too high and that several of the more favourable developments it had been hoping for in August simply had not materialised. Oil prices had moved well above expectations because of the conflict in the Middle East, global cost pressures were building partly due to demand linked to artificial intelligence, and underlying inflation in July came in stronger than forecast. The board said it will continue to do what it considers necessary to bring inflation back to target, including raising the cash rate again if required. That is not a prediction of another rise. It is the Reserve Bank keeping its options open, and it is worth reading it that way rather than as a signal that a November increase is locked in.

An affordability record within reach

On the same day the minutes came out, property group REA published new modelling showing that if the Reserve Bank does raise rates again next month, servicing a mortgage on a median priced home would take up 37.4 per cent of a typical household's income, based on a 20 per cent deposit and a standard 30 year loan. That is close to the record of 37.5 per cent set all the way back in December 1989. The national figure is still just below that peak, but Queensland, South Australia and Western Australia have each already passed their own previous records. Westpac and ANZ are among the banks now expecting a rise in November, and Deloitte Access Economics estimates that a cash rate of 4.85 per cent would add roughly nine thousand dollars a year in interest for an average owner occupier loan.

That is a genuinely difficult number for a lot of households, and it deserves to be taken seriously rather than brushed aside.

The context that matters alongside it

At the same time, the Reserve Bank's own minutes point to a system that is under pressure without being in crisis. Scheduled mortgage payments have risen to around 10 per cent of household disposable income nationally, close to the peak reached in 2024. But the board noted that only around 2 per cent or fewer of owner occupier borrowers are currently facing a genuine cash flow shortfall, well below the peak seen in 2023 and 2024, and this is expected to stay low even under further pressure. Most households also still hold meaningful savings buffers in offset and redraw accounts, typically ranging from just under a year of scheduled repayments for lower income households up to close to two years for higher income households. Arrears remain low and very few borrowers are in negative equity, a position the Reserve Bank expects to hold even if prices fell a further 20 per cent from here.

Put simply, this is a story of real strain for many households sitting alongside genuine resilience in the system overall. Both things are true at once.

What this means if you are budgeting right now

If a November rate rise would stretch your household, the sensible move is to work out your numbers now rather than wait for the decision itself. That means knowing what your repayment would look like at a higher rate, checking whether your current loan structure still suits you, and understanding where you sit against the serviceability buffer lenders are required to test against, currently three percentage points above your actual rate, a rule set by the banking regulator APRA. Whether refinancing, restructuring part of your loan, or simply adjusting your budget makes the most sense depends entirely on your own circumstances. A conversation now, before the Reserve Bank's next meeting, usually leaves you with more options than waiting until after.

Figures in this article are drawn from the Reserve Bank of Australia's minutes of its 28 to 29 September 2026 meeting (released 13 October 2026), The Adviser's reporting of REA Group and Deloitte Access Economics data (13 October 2026), and APRA's confirmation of its current serviceability buffer settings.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Please speak with a Claremont Financial broker before making any borrowing decision.