Week 1 — 05-11 January 2026

Inflation Eases Slightly But RBA Still Watching Closely

What Happened This Week

Recent data showed Australia’s CPI inflation dipped, reflecting some relief in price pressures. Annual inflation dropped from 3.8% to 3.4%, but economists warn this relief may be temporary.

Why It Matters

Inflation data influence the RBA’s monetary decisions. While a dip is good news, persistent price pressures in services and housing mean the RBA may still sit tight.

Who It Affects

• Borrowers with variable rates won’t feel immediate relief

• Property investors pricing cash flows must account for higher service costs

• Business lenders watching operating costs

Broker Insight

This type of inflation result keeps the RBA on hold rather than moving to cuts or hikes. Markets are pricing in a cautious outlook through early 2026.

What You Should Do Next

• Review cash flow plans in light of ongoing cost pressures

• Consider locking rates where it makes sense

• Talk to a broker about your refinancing windows

Week 2 — 12-18 January 2026

RBA Deputy Governor Signals End of Rate Cuts - What Borrowers Should Know

What Happened This Week

The Reserve Bank’s Deputy Governor said that near-term interest rate cuts are unlikely - despite inflation easing modestly - because inflation remains above target and the RBA wants sustained evidence before easing monetary policy.

Why It Matters

Fixed and variable borrowing costs have been a key focus for borrowers, and many are watching for rate relief. However, the RBA’s current stance suggests no imminent rate cuts, meaning borrowing costs may stay higher for longer.

Who It Affects

• Home buyers and investors: No quick drop in mortgage costs yet

• Refinancers: Plans to refinance to lower rates might need patience

• Business and SMSF borrowers: Cost of funds remains steady

Broker Insight

Even if headline inflation eases, central banks focus on underlying inflation and future outlook. The RBA is cautious, and its priority remains price stability rather than short-term borrower relief.

What You Should Do Next

• Lock in competitive fixed rates if your strategy suits

• Review borrowing strategies with your broker - especially for SMSF and business loans

• Don’t chase rates; align choices to financial goals

Week 3 — 19–25 January 2026 

Fixed Rates Rise as Lenders Brace for RBA Decision 

What Happened This Week

This week, the lending and economic landscape continued to evolve, with lenders and economists expressing a cautious outlook on interest rates amidst changing competition and lending dynamics. Fixed home loan rates from several major lenders have risen as markets anticipate a possible cash rate increase from the Reserve Bank of Australia (RBA) in early February. For instance, both the Commonwealth Bank of Australia and Macquarie Bank have raised their fixed-rate offers ahead of the upcoming RBA decision. Analysts now see a greater likelihood of a rate hike during the RBA's meeting on February 3.

Additionally, we are seeing shifts in lending policies across the market. ANZ has tightened its lending criteria for companies and trust structures, lowering maximum loan-to-value (LVR) ratios and adjusting eligibility requirements for new trust and company home loans. This move reflects a broader trend among banks to reassess risks associated with non-standard borrower structures.

Non-bank lenders are experiencing strong growth in loan originations through brokers, with these originations accounting for approximately 75% of loan settlements. This trend is driven by brokers increasingly turning to alternative lenders to help borrowers with tighter deposit or credit profiles.

Moreover, the small and medium-sized enterprise (SME) lending market is expanding. Renown Lending has significantly increased its national funding pool to support cash flow, asset-backed loans, and short-term property loans across multiple states, highlighting the rising demand for non-bank business lending solutions.

Why It Matters

Interest Rate Expectations: The recent movement in fixed loan pricing ahead of the RBA meeting indicates that lenders are preparing for potentially higher cash rates. Borrowers who plan to fix their rates should be aware that pricing is already changing, which can impact refinancing decisions, loan strategies, and budgeting for repayments.

Trust and Company Structures: Stricter policies regarding loans through trust and company structures by major banks mean that investors using these arrangements may need to reevaluate their borrowing strategies or consider alternative lenders.

Broker Market Dynamics: Brokers play a crucial role in facilitating new settlements. Consequently, competitive alternatives to major banks are becoming increasingly vital, particularly for borrowers facing deposit or credit constraints.

SME Lending: The growth of non-bank lending options to support small and medium enterprises reflects a shift toward more flexible funding sources outside traditional banking channels. This trend could benefit business borrowers seeking customised financing solutions.

Who It Affects

• Home buyers: especially those considering fixed rate options

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• Property investors: with trust or company structures

• Refinancers: evaluating when and how to refinance

• SMSF property borrowers: relying on alternative lending options

• Business owners: looking for SME funding and cashflow finance

• Brokers: advising clients on lender panel options and strategy

Broker Insight

With markets now eyeing the RBA’s February meeting closely, lenders are pre-emptively adjusting pricing and tightening certain credit policies. This environment emphasises the importance of proactive planning. Borrowers considering locking in fixed rates should weigh the timing of these moves against their personal cash flow and risk tolerance. Likewise, investors using trusts or company structures need to understand new eligibility requirements and engage with brokers early to explore all available channels-including non-bank lenders where appropriate. Competitive lender panels and broker expertise continue to be valuable in navigating these nuanced policy shifts.

What You Should Do Next

• Review cash flow plans in light of ongoing cost pressures

• Explore non-bank options

• Talk to a broker about your refinancing windows