May Rate Report: Interest Rates Continue Their Climb.

By Scott McDonnell posted on May 05, 2026

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Interest rates, inflation and global conditions are continuing to create economic uncertainty nationwide, and Australia is no different.

At their third meeting for the year, the Reserve Bank of Australia has decided to increase the cash rate to 4.35%[1], marking another rise this year. This is part of their ongoing efforts to bring inflation under control.

Why Are Rates Going Up? 

In simpler terms:

  • Inflation is still too high [2].
  • Employment remains strong[3].
  • Global uncertainty continues[4].

Higher rates aim to help slow spending and ease inflation pressure.

If You Have a Home Loan…

A rate rise will likely mean higher repayments on variable loans.

Now is the time to reach out to

  • Review your current rate
  • Check if your lender is still competitive
  • Look at options like refinancing or restructuring

Even small changes can make a meaningful difference to your repayments.

If  You’re Looking to Buy…

Rising rates may reduce your borrowing power, meaning you may not be able to borrow as much as before.

However:

  • Everyone’s situation is different
  • There may still be opportunities depending on your position

Getting clear information on your numbers early is key.

What’s Next? 

While there’s plenty of speculation, future rate moves will depend on inflation, jobs and the broader economy.

Rate rises can feel challenging, but they’re only part of the picture. Speaking to you MoneyQuest broker can help you review your options and help find sustainable solutions to your finance needs.

[1]Bank (2026). Statement by the Monetary Policy Board: Monetary Policy Decision | Media Releases. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/media-releases/2026/mr-26-12.html.

[2]Australian Bureau of Statistics (2025). Consumer Price Index, Australia. [online] Australian Bureau of Statistics. Available at: https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release.

[3]ABS (2025). Labour force, Australia. [online] Australian Bureau of Statistics. Available at: https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release.

[4] Dew, L. (2026).IMF. (n.d.). What the Continued Global Uncertainty Means for You. [online] Available at: https://www.imf.org/en/Blogs/Articles/2021/01/19/blog-what-the-continued-global-uncertainty-means-for-you.

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Disclaimer:

This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).

Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.

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