RBA raises rates | Buying while renting | Using your equity to fund renovations
- Mar 26
- 4 min read
Updated: 3 days ago
The Reserve Bank’s decision to raise interest rates is big news and has already reshaped the market. Here’s what else to think about as you make your next property decision:
Banks respond quickly to Reserve Bank rate rise
Rentvesting: a different path into property
Homeowners are putting their equity to work
Keep reading for all the news
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How the market has responded to the rate rise
Since the March 17th increase, lenders have now rolled through the 0.25-percentage-point rise to borrowers, with repayments lifting across the board.
This follows the February move, meaning rates have now increased twice in quick succession, adding pressure to household budgets.
Globally, interest rates also remain elevated, with Australia continuing to move in line with broader trends across major economies.
At the same time, fixed rates had already been moving higher ahead of the decision, as markets priced in further increases.
Shorter-term fixed (1–2 years) has seen the most movement, reflecting near-term expectations.
Mid-term fixed (around 3 years) has also repriced higher, but more gradually.
Overall, fixed rates are now being set based on where markets expect rates to go, not where they are today.
What to watch next
With rates moving again, attention now shifts to what comes next.
Economists are focused on inflation, labour market conditions and global pressures – all of which will influence whether rates hold, rise further or begin to ease.
With repayments now adjusting, this is typically when small differences between loans start to matter more.
We can help you review your current loan and see whether it’s still competitive in the current environment.
Rentvesting is gaining traction
Rising rents are pushing more first home buyers to rethink how they enter the market.
Australia’s rental market has tightened again, with rents rising 5.5% over the year to February, according to Cotality.
At the same time, vacancy rates remain low, keeping competition high and putting pressure on renters’ budgets.
That’s one reason some buyers are turning to rentvesting.
A different way to enter the market
Rentvesting involves buying an investment property in a more affordable area, while continuing to rent where you live.
According to PropTrack, about 5.5% of first home buyers are now considering this approach.
For some, it can mean:
Entering the market sooner.
Buying in areas with stronger rental demand.
Starting to build equity earlier.
Why it’s coming up more often
As rents rise, saving a deposit can take longer.
That’s prompting some buyers to look at alternatives instead of waiting years.
In some cases, the numbers between renting and owning may be closer than expected – especially when rental costs keep increasing.
What to consider
Rentvesting isn’t a one-size-fits-all strategy.
Loan structure, rental income and long-term plans all need to be factored in.
We can help you run the numbers, compare scenarios and see whether this approach fits your situation.
Homeowners are putting equity to work
Borrowers are using their existing property to create flexibility.
With interest rates rising in February and again in March, many homeowners are taking a more active approach to their finances.
One tactic some people are using is refinancing to access equity – the difference between the value of their home and their outstanding mortgage.
Rather than leaving it unused, borrowers are using equity to:
Fund renovations.
Consolidate higher-interest debt.
Improve overall cash flow.
Why is this happening
In a higher-rate environment, sitting still can feel expensive.
Using equity can be a way to restructure your finances, not just increase borrowing.
For some, that means reducing monthly pressure.
For others, it’s about improving the value or usability of their home.
What this means for you
Equity isn’t just something that builds over time – it can be a useful financial tool when used correctly.
But how you access and structure it matters.
Things like loan splits, repayment strategy and long-term plans all play a role.
We can help you understand how much equity you may have and how to use it in a way that fits your goals.
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Thank you for joining us for this edition of My Property Pulse! We hope you got useful insights, and if you have any questions, please reach out.
Chris, Greg, Doug, and the whole My Finance Agent
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