The estimate assumes an owner-occupier application with no other debts, no dependants and minimum expenses. Canstar noted that borrowing capacity figures are indicative and can differ between lenders.
If the cash rate rises again in May, as major bank economists are forecasting, Canstar estimates the same borrower’s borrowing capacity could be lower by about $37,000 in total.
Estimated decrease in borrowing capacity as a result of RBA hikes
Borrower
Hike in March
Cumulative impact across March + Feb
Cumulative impact: March + Feb + May
Individual (avg. wage)
-$12,000
-$25,000
-$37,000
Couple (2 x avg. wage)
-$24,000
-$49,000
-$73,000
Source: Canstar.com.au. Based on an owner-occupier taking out a 30-year loan at the average RBA rate.
Commonwealth Bank, Westpac, NAB and ANZ have each signalled they still anticipate another 0.25 percentage point increase in May, which would take the cash rate to 4.35%, reversing the effect of the three rate cuts delivered in 2025.
“If inflation continues to soar and the RBA is forced to hike again as soon as May, as the banks are forecasting, buyers could be staring down an almost $40,000 hit to their budgets in just four months,” said Sally Tindall (pictured right), data insights director at Canstar.com.au.
“Right now, home buyers are facing the second highest cash rate setting this country has seen in the last 14 years, at the same time property prices in key areas continue to march north, albeit at a slower pace. This makes what was already a tricky equation a near-impossible puzzle to solve for many prospective home owners.