RBA holds the cash rate again: what a second straight pause means for first home buyers

The Reserve Bank left the cash rate on hold at 4.35% on Tuesday 11 August, its second straight hold after three rate rises earlier in the year. For first home buyers who have spent 2026 watching their borrowing power shrink with every RBA meeting, back to back holds are a welcome pause, but Governor Michele Bullock made clear the board is not done watching inflation just yet.

What the RBA decided and why

The board's decision followed June quarter inflation data that came in a little softer than expected: headline CPI eased to 3.8% annually (from 4.0%), while the RBA's preferred trimmed mean measure held at 3.6%. Both readings remain above the RBA's 2 to 3% target band, which is why Bullock described inflation as "still too high" in her post-meeting press conference and said the board had discussed whether to hike or hold, not whether to cut.

Unemployment sitting at around 4.4% gives the RBA some room to wait rather than move again immediately. The board appears to be watching how much of this year's three rate rises has actually flowed through to household spending before deciding its next step, which is a reasonably common pattern once a tightening cycle nears its peak.

Why some lenders are cutting rates anyway

Even with the cash rate unchanged, competition between lenders has kept moving. Roughly 50 lenders now offer at least one variable home loan rate below 6% per annum, and some lenders have trimmed fixed rates in anticipation of eventual RBA cuts further down the track. That is a reminder that the cash rate is only one input into what you are actually offered, your own rate depends heavily on your deposit size, credit history and which lender you approach.

• Big four banks: most are pencilling in at least two rate cuts across 2027 and 2028, with forecasts varying on timing.
• Not every bank agrees: some economists still flag a chance of another hike if inflation proves sticky, so a further RBA move in either direction remains possible.

What this means for first home buyers

A second consecutive hold gives buyers a steadier backdrop for budgeting, at least for now. It does not mean borrowing is about to get materially cheaper. Most major bank forecasts do not expect a cash rate cut before 2027, so anyone assuming relief is close may be planning around a timeline that is still a while away.

• Shop around rather than assuming your current or first-quoted lender is competitive. With around 50 lenders under 6%, a broker or comparison check could meaningfully change your monthly repayment.
• Stress-test your budget at a rate a percentage point or two above today's offer, in case the RBA's "further hikes possible" language becomes reality.
• Revisit your maximum borrowing capacity now that this year's three hikes are fully priced into lender assessments, rather than relying on an estimate from earlier in 2026.

Run the numbers

These tools can help you translate today's rate decision into your own numbers:

• Interest Rate Shock Tester - see how your repayments would change if the RBA lifts rates again before the eventual 2027 cuts arrive.
• Borrowing Power Calculator - check what you may be able to borrow now that this year's rate rises are reflected in lender serviceability tests.
• Mortgage Offset Calculator - model how an offset account could reduce the interest you pay while rates stay elevated.
• Am I Ready to Buy? - get a general read on your readiness before committing in a rate environment that is stable for now but not guaranteed to stay that way.