Three rate rises in 2026: stress-testing a Victorian purchase

The cash rate has risen three times in 2026 and now sits at 4.35%, with the Reserve Bank's next decision due on 11 August. If you are buying in Victoria this year, the useful question is not where rates go next. Nobody reliably knows. The useful question is whether your purchase survives if they keep climbing.

Where rates sit, and how we got here

The RBA lifted the cash rate by 25 basis points three times across the first half of 2026, taking it from 3.60% at the start of the year to 4.35%, then held it steady at the June meeting. Economists at the major banks are publicly split on whether another rise is coming this year. The next decision lands on 11 August 2026.

Recent years should make everyone humble about rate forecasts. Markets priced cuts that became hikes and hikes that became pauses. Build a purchase that works across the range of outcomes rather than betting on one.

What a rate move does to repayments

The table below shows monthly repayments on a 30-year principal-and-interest loan starting from a 6.50% rate, and what each increase adds. It is illustrative only: your rate, fees and loan structure will differ.

Loan	At 6.50%	+0.25%	+0.50%	+1.00%
$500,000	$3,160	$3,243 (+$83)	$3,327 (+$167)	$3,496 (+$336)
$650,000	$4,109	$4,216 (+$107)	$4,324 (+$215)	$4,545 (+$436)
$800,000	$5,057	$5,189 (+$132)	$5,322 (+$265)	$5,594 (+$537)

Two things stand out. A single 25 basis point move is survivable on almost any sensible budget. A full percentage point, roughly what 2026 has already delivered, is $4,000 to $6,500 a year on these loan sizes. That is the scenario to test yourself against.

The buffer the bank applies, and the one you should

• APRA's serviceability buffer means lenders already assess you at roughly 3 percentage points above the rate you sign at. Passing the bank's test is the floor, not the goal.
• Run your own test at +1.00%. If the repayment at one point higher forces lifestyle decisions you would resent, the loan is too big regardless of what the bank approves.
• Rates are not the only rising cost. Insurance premiums, owners corporation levies and, for investors, Victoria's land tax stack all climb independently of the RBA.

What 11 August can and cannot change

Three scenarios, none of which should decide your purchase. A hold changes nothing. Another 25 points moves you one column right in the table above. A later cut, if the economy slows, improves your position from a base you already proved you could afford. If a single 25 point move breaks the budget, the problem is the budget, not the Reserve Bank.

The upside: rising rates hand buyers leverage

• Fewer competitors: midwinter auction clearance in Melbourne has hovered around 50%, and city values fell through the June quarter.
• Longer campaigns and vendors meeting the market mean the asking price is a starting point, not a verdict.
• The buyers who do well in this market negotiate from evidence: comparable sales, days on market, and a stress-tested walk-away number set before auction day.

How to stress-test a purchase before you sign

• Fix your true loan size: price, stamp duty, costs, minus your deposit.
• Get actual recent comparable sales for the property, not the agent's guide alone.
• Model repayments at today's rate, then +0.25%, +0.50% and +1.00%.
• Add the non-loan holding costs: rates, insurance, maintenance, any owners corporation levies, land tax if investing.
• Set the walk-away price where the +1.00% scenario still works, and hold it.

This is exactly why every Precursor Full Due Diligence report includes a rate sensitivity table and a fair-value range built from comparable sales for the specific property: so the walk-away number is calculated, not guessed.

Sources: RBA cash rate decisions and statements, 2026 (rba.gov.au); major-bank commentary on the June 2026 hold and August outlook; APRA serviceability guidance. Repayment figures computed with standard loan amortisation and rounded to the nearest dollar.