RBA Rate Rise: What It Means If You Are Planning to Build
The Reserve Bank of Australia has lifted the cash rate by 0.25% to 3.85%, announced 3 February 2026.
A rate rise can sound bigger in the headlines than it looks on paper. For many households, a 0.25% move is a manageable change, especially if your budget already has a buffer built in.
What changes first?
If your lender passes on the increase, variable repayments can rise. As a rough guide, a 0.25% increase is often around $75 per month on a $500,000 loan, and up to around $150 per month on a $1,000,000 loan, depending on your interest rate and loan term.
Why it is not the end of the world?
Home loan approvals are stress-tested. Under APRA guidance, lenders apply a minimum 3% serviceability buffer above the loan rate when checking affordability.
In simple terms, banks do not just assess you at today’s rate. They assess whether you can still manage repayments if rates rise from here.
What this means if you are building?
The best move is to stay practical. Know your comfortable budget, keep a buffer, and choose a design that suits your lifestyle without pushing to the limit. A good home plan is one you can hold comfortably through changes, not one that only works when everything is perfect.
Talk to Us
If you would like a quick sense check, speak with our friendly New Home Consultants. They can help you understand what this change means for your budget, talk you through home and land options, and guide you through the next steps with confidence.
