Monday Market Update: What Borrowers Are Doing Right Now

ByBase Home Loans

The conversation has shifted again.

Over the past few weeks, we’ve moved from cautious optimism around rates, to a more uncertain environment driven by global events, rising fuel prices, and renewed inflation concerns.

Many are wondering what this all actually means for borrowers?

Let’s break it down.

Who This Market Update Matters Most For

  • Homeowners who haven’t reviewed their loan in 12–24 months
  • Buyers unsure whether to act or wait
  • Anyone concerned about rising living costs
  • Borrowers wanting clarity on their financial position

Where Rates Sit Right Now

The Reserve Bank of Australia has recently increased the cash rate to 4.10% as it continues to battle inflation.

At the same time:

  • Inflation is still sitting above target
  • Fuel prices are rising sharply
  • Markets are now factoring in the possibility of further rate increases
Check if you’re overpaying for your mortgage

The key issue?

Global instability, particularly the ongoing conflict in Iran, is pushing energy prices higher, which flows directly into inflation.

And when inflation rises…rates tend to follow.

The New Pressure Point: Fuel & Cost of Living

This is where things are changing quickly.

  • Oil prices are surging toward $120 per barrel
  • Petrol prices across Australia are climbing
  • Businesses and households are feeling immediate pressure

For borrowers, this isn’t just a headline, it’s cashflow.

Higher fuel costs → higher living expenses → reduced borrowing capacity.

What Borrowers Are Doing Right Now

This is the most important shift.

We’re seeing three clear behaviours emerge:

  1. “Wait and See” Buyers

Many buyers, particularly first home buyers, are stepping back temporarily.

Uncertainty around:

  • Interest rates
  • Global events
  • Cost of living

…is leading to hesitation.

Globally, this behaviour is already showing up as reduced buyer activity and delayed decisions.

2. Proactive Refinancers

At the same time, existing homeowners are becoming more active.

They’re asking:

  • “Am I on the right rate?”
  • “What happens if rates rise again?”
  • “Can I reduce my repayments now?”

This is being driven by:

  • Recent rate increases
  • Fear of further increases
  • Cashflow pressure from everyday costs

This is where we’re seeing the strongest enquiry activity right now.

Should I refinance?

3. Strategic Borrowers (The Quiet Movers)

Interestingly, a third group is leaning in rather than pulling back.

These borrowers are:

  • Getting pre-approvals early
  • Locking in borrowing capacity
  • Acting decisively when opportunities arise

Why?

Because they understand:

Uncertainty doesn’t stop markets, it just changes who participates.

What This Means for Borrowing Power

If current conditions continue:

  • Borrowing capacity may tighten further
  • Lenders may become more conservative
  • Assessment buffers could remain elevated

At the same time, property supply remains constrained, which continues to support prices in many markets.

Historically, even during global disruptions, property markets don’t necessarily fall, they often pause, then adjust.

check your borrowing capacity

The Key Tension Right Now

Borrowers are weighing two competing forces:

Risk of Acting:

  • Higher interest rates
  • Economic uncertainty

Risk of Waiting:

  • Rising property prices
  • Reduced borrowing capacity
  • Increased competition when confidence returns

This tension is driving behaviour more than anything else.

What Smart Borrowers Are Doing

The most strategic borrowers right now are:

✔️ Reviewing their loan (not waiting)
✔️ Getting clarity on borrowing capacity
✔️ Stress-testing repayments
✔️ Keeping optionality open

They’re not reacting emotionally. They’re planning.

This isn’t a “stop” market.

It’s a decision market.

Some borrowers will pause.
Some will panic.
But the ones who move strategically and with clarity, tend to be the ones who benefit most over time.

Key Takeaways for Borrowers in 2026

  • Borrower behaviour is shifting toward caution and strategy
  • Refinancing activity is increasing due to cost pressures
  • Global events are influencing inflation and rate expectations
  • Planning is more important than timing

Need Clarity on Where You Stand?

Whether you’re:

We can map out your position and next steps.

👉 Book a strategy session with Base Home Loans and move forward with confidence.

book a call now

Frequently asked questions

Strategic borrowers are:
– Reviewing their current loan
– Understanding their borrowing capacity
– Getting pre-approved before making decisions
– Planning for multiple scenarios

They’re not reacting emotionally — they’re making informed decisions based on their financial position.

Interest rates in Australia are influenced by inflation and decisions made by the Reserve Bank of Australia.
With ongoing global uncertainty and rising energy costs, there is still a possibility of further rate increases if inflation remains elevated.
However, forecasts can change quickly — which is why borrowers should focus on having a flexible loan strategy rather than trying to time the market.

This depends on your risk tolerance and financial position.
Fixed rates provide certainty and protection from further increases
Variable rates offer flexibility and the ability to benefit if rates stabilise or fall
Many borrowers are currently choosing split loans to balance both.
The right structure should align with your cashflow and long-term plans

There is no “perfect” time to buy, only the right time based on your financial position.
In uncertain markets:
Some buyers pause
Others act strategically with less competition
If you have stable income, a clear borrowing capacity, and a long-term outlook, buying during uncertain periods can actually present opportunities.

Lenders assess your living expenses when determining how much you can borrow.
As costs like fuel, groceries, and utilities increase, your assessed expenses may also rise — which can reduce borrowing capacity.
This is why reviewing your position regularly is critical in the current environment.

If you haven’t reviewed your loan in the past 12–24 months, it’s worth checking.
Many borrowers are refinancing to:
Reduce repayments
Access equity
Improve loan structure
Even a small rate difference can result in significant long-term savings.

Global events can impact sentiment, but property markets are also driven by local factors such as supply, population growth, and employment.
In many Australian markets, limited housing supply continues to support prices — even during uncertain periods.
Rather than trying to predict short-term movements, most successful buyers focus on long-term positioning.

You may be overpaying if:
You haven’t reviewed your loan in over 2 years
Your rate is higher than current market rates
Your financial situation has improved but your loan hasn’t been updated
A quick mortgage review can identify whether better options are available.

The best first step is clarity.
Before making any decisions:
Understand your borrowing capacity
Review your current loan
Assess your repayment comfort level
From there, you can make informed decisions — whether that’s refinancing, buying, or waiting.

Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions. The examples used here are illustrative in nature and do not reflect any actual people or clients.

Similar Posts