What the RBA’s Back-to-Back Rate Hikes Mean for Australian Expats With Property

If you’re an Australian expat with a variable-rate investment loan, the past five weeks have not been kind to your repayments. The Reserve Bank of Australia has raised the cash rate twice in a row — these back-to-back rate hikes came first in February to 3.85%, then again on 17 March 2026 to 4.10% — reversing every rate cut made in 2025 in the space of a single board meeting cycle.

The March decision was close — a narrow five-to-four vote — but the outcome is clear: rates are rising again, and Australian expats holding investment property need to understand what this means for their loans, their cashflow, and their borrowing power.

Why Did the RBA Hike Again?

The RBA’s statement was direct. Inflation “picked up materially in the second half of 2025” and demand is outstripping supply across the economy. However, the conflict in the Middle East has disrupted oil passage through the Strait of Hormuz. As a result, it is compounding domestic inflationary pressures by driving up global energy costs.

Governor Michele Bullock signalled that while the RBA doesn’t want to trigger a recession, getting inflation back to its 2–3% target is the priority. The RBA currently expects inflation to return to target by late 2026 or 2027, though those estimates may be revised upward given ongoing energy market volatility.

What It Means for Your Mortgage Repayments

Each 0.25% rate rise adds real money to variable-rate loan repayments. Here’s what the two back-to-back hikes look like in dollar terms across different loan sizes:

Based on variable P&I repayments. Assumes full 0.50% pass-through by lender.

For expats with multiple properties, the cumulative impact of back-to-back rate hikes can be substantial — a portfolio of two properties with $800,000 in total lending could see over $400/month in additional repayments since January 2026.

The APRA Buffer Problem: How Back-to-Back Rate Hikes Crush Borrowing Capacity

Rising rates don’t just affect your existing repayments — they also hit your ability to borrow more. This is where APRA’s 3% serviceability buffer becomes critical for expats to understand.

Under APRA rules, lenders must stress-test every new loan application at the actual interest rate plus 3%. So with mortgage rates now sitting around 6.25–6.50% for investment loans, lenders are assessing your capacity to repay at 9.25–9.50%.

For Australian expats, this is compounded by a second hurdle: lenders also apply a 20% income shading to foreign income — meaning only 80% of your overseas salary is counted toward serviceability. The combined effect is significant:

Indicative only. Actual capacity depends on lender, expenses, existing debts, and currency. Speak to Atlas Mortgages for a full assessment.

On top of this, APRA introduced a new Debt-to-Income (DTI) cap in February 2026, restricting banks from writing more than 20% of new mortgages to borrowers whose total debt exceeds six times their income. For expats with multiple properties or higher leverage, this adds another layer of complexity.

What Should Expats Do Right Now?

The rate environment isn’t a reason to panic, but it is a reason to review. Here’s what we’re advising clients right now:

• Review your rate. Many expats are sitting on loans that haven’t been reviewed in years. In a rising-rate environment, the gap between your existing rate and what’s available can be substantial.
• Consider your loan structure. Interest-only periods can materially reduce monthly repayments — freeing cashflow while you’re living and earning overseas.
• Use offset accounts. Cash held in a 100% offset account reduces the principal you’re charged interest on. With rates rising, the value of every dollar in offset grows.
• Get your borrowing capacity assessed now. If you’re planning to purchase or refinance, get a formal assessment before rates move again. The next RBA decision is May 2026, and some economists are already forecasting a third hike.
• Don’t approach the Big Four directly. Most major banks have tightened or withdrawn expat lending policies. A specialist broker can identify which of 30+ lenders will actually work for your profile.

The Outlook for Australian Expats with Property

The RBA has made clear it will be data-dependent from here. Inflation needs to show a clear downward trend before cuts are back on the table. The RBA’s own forecasts put inflation returning to the 2–3% target band by end of 2026 at the earliest — suggesting the higher-rate environment is the new normal for now.

For Australian expats, the message is the same as it always has been: the banks that want your business, the right loan structure, and a clear strategy matter more than where the RBA cash rate sits on any given day.

Contact Us

If managing your financial affairs across borders is starting to feel overwhelming, you’re definitely not alone. It’s a complex space, and having the right support can make all the difference. At Atlas Wealth Group, we specialise in supporting Australian expats with cross-border tax planning, superannuation, mortgages and wealth management. Contact us to arrange a consultation with a qualified adviser who specialises in Australian expat financial planning to get personalised guidance tailored to your circumstances.

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Disclaimer: This article is intended for informational purposes only and does not constitute legal or financial advice. Individuals should consult licensed professionals when seeking guidance regarding their financial circumstances.