RBA bosses warn rates are only just 'sensible' ahead of the 29 September decision

Reserve Bank governor Michele Bullock and deputy governor Andrew Hauser fronted a parliamentary economics committee on 18 September, just over a week before the board's next cash rate decision. The headline takeaway for anyone with a home loan, or trying to get one, was a blunt admission from RBA leadership that current interest rates are "only just" back to what officials called a more sensible level, a signal that the central bank sees limited room to keep policy loose if inflation does not keep cooling.

The cash rate has sat at 4.35% since the board's August meeting, its second consecutive hold after a run of rises earlier in the year. Bullock told the committee the Reserve Bank now needs to work out whether that rate is high enough to bring inflation back within target, language markets read as keeping a further increase firmly on the table for the board's meeting on 28 and 29 September.

What the Reserve Bank actually said

Deputy governor Hauser framed the comments in terms of long-run global interest rates, noting that settings are "probably rather closer now to a more sensible level" than they were a year or two ago, after an extended period of unusually cheap borrowing worldwide. Bullock's own remarks focused closer to home, telling MPs the board still has a judgement call to make about whether current settings are doing enough to restrain price pressures. Neither official pre committed the board to a particular outcome, and a hold remains a real possibility, but the tone was read by several outlets, including the ABC and Bloomberg, as leaving the door open to another rise.

This is a shift from earlier in the year, when the Reserve Bank's language leaned more heavily on giving the economy room to absorb prior increases. The move toward firmer language about inflation risk is one reason the major banks have been revising their own forecasts for the September meeting over recent weeks, with some now expecting a move this month and others still tipping November.

Why the timing matters

• The decision lands soon. With the board meeting on 28 and 29 September, first home buyers currently comparing loans or sitting on a pre approval have a short window before any change is confirmed.
• Lenders react to expectations, not just decisions. Serviceability assessments already build in a buffer above the advertised rate, so shifting expectations can influence how much a lender is prepared to approve even before the board meets.
• Forecasters remain split. Some economists still expect the Reserve Bank to hold in September and act later in the year instead, so this is a live, contested call rather than a settled outcome.

What this means for first home buyers

None of this is a reason to panic or to rush a purchase before the 29 September decision. Testimony to a parliamentary committee is not the same as a rate announcement, and the board could just as easily hold again. What it does suggest is that the risk of at least one more rise this year has not gone away, which makes it worth checking your own numbers rather than relying on headlines alone.

• If you have a pre approval, confirm how it was assessed and whether it allows room for a further rate increase before it expires.
• Stress test your budget against a higher rate before you commit to a purchase price, not after settlement.
• Speak with your lender or a mortgage broker about fixed, variable and split loan options. A broker can weigh the trade-offs against your own circumstances in a way general information like this cannot.

Run the numbers

Rather than guessing how a possible rate rise would affect you, it is worth testing it directly against your own situation:

• Interest Rate Shock Tester - see how your repayments would hold up if the cash rate rises again from here
• Borrowing Power Calculator - check how a higher assessment rate could change what a lender may be willing to approve