Over twelve months the cash rate fell to its lowest point of the cycle, then climbed straight back. On an $800,000 loan that round trip added about $4,577 a year to repayments.
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Twelve months ago, borrowing was about as cheap as it had been since 2023. In August 2025 the RBA cut the cash rate to 3.60%, the low point of the easing cycle. Variable rates sat at their floor, and the sharpest fixed deals were still on the table.
Today the cash rate is 4.35%. It is back exactly where it sat in early 2025. The whole easing cycle has been unwound, and most of 2025's cheap fixed rates have gone with it.
We pulled the year apart on an interactive timeline so you can see how it happened, month by month: The Year That Shaped Your Mortgage. It tracks every rate decision, the inflation data behind it, and what each move meant for repayments.
The number that matters is the one that lands on your statement. On a representative $800,000 owner-occupier loan over 30 years, the move from 3.60% to 4.35% lifted the variable rate from about 5.39% to 6.14%. Monthly repayments went from roughly $4,487 to $4,869. That is an extra $381 a month, or close to $4,577 over a year. (These are illustrative figures. Your actual rate and repayment depend on your lender and loan.)
The turn was not gradual. Inflation had been drifting up since late 2025, but the decisive moment came in February 2026, when conflict in the Middle East closed the Strait of Hormuz and disrupted about a fifth of the world's oil flow. Oil spiked, fuel prices followed, and headline inflation pushed to 4.6%, well above the RBA's 2 to 3% target. The Board responded with four hikes between February and May, then held at 4.35% in June.
The chain ran from a global event to your repayments: oil, then inflation, then rates.
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A few things matter for borrowers right now. Rates have round-tripped, and the cheap fixed window is closed for the time being. Borrowing capacity is tighter, with APRA's 3% serviceability buffer still in place and a new debt-to-income speed limit capping how much high-borrowers can take on. The property market has split, with Sydney and Melbourne softening through 2026 while Perth, Brisbane and Darwin held firm.
There is also a change worth flagging for investors. From 1 July 2027, negative gearing will be limited to new builds, and the capital gains tax discount will be reformed. Existing investors are grandfathered, so if you already hold an investment property you are not affected. Future purchases of established homes face a tougher position.
This is the question we are asked most right now. With the cheap fixed deals gone, fixing today locks in a higher rate, but it buys certainty if rates climb again. Staying variable keeps you flexible and works in your favour if the next move is down, which nobody can call yet.
There is no single right answer. It depends on your loan size, how long you plan to hold, and how much repayment certainty is worth to you. We built a calculator that models the break-even and total interest across fixing all, part, or none of your loan: Fixed vs Variable Rate Calculator. Run your numbers, then we can talk through what they mean for your situation.
None of this is a forecast. The next RBA decision is on 11 August, and economists are split on where it goes. What we would do is check your numbers against today's reality rather than the rate you signed up to. If you fixed in 2025, know when your term ends and what your loan reverts to. If you are on a variable rate, it is worth seeing whether a review or a restructure improves your position.
The headlines are one thing. Your numbers are another. If you want to talk through where you sit, we are here for it.
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