Welcome to Volume 4 of the Canberra Lender Brief. August is when the new financial year stops being a reset and starts being a baseline. Here’s where things have landed.
The rate picture
The RBA left the cash rate unchanged at 4.35% in August, following the June and July holds. That follows three increases earlier in 2026 that took the rate from 3.60% back to 4.35%, driven by renewed inflation pressure.
The prevailing economist view is that rates stay on hold through the remainder of 2026, with the earliest cuts not expected until 2027. Growth is slowing, the labour market is softening, and inflation is easing but remains above the RBA’s 2-3% target band, a combination that argues for patience rather than movement in either direction.
For borrowers, the practical read is that the rate environment is likely to be stable for a while. That reduces the urgency to fix purely as protection against imminent rises, and makes the decision more about your own circumstances than about timing the market.
The fixed-rate inversion, still going
One of the more unusual features of 2026 persists: several lenders continue to price shorter fixed terms below their variable rates. This inverts the normal relationship, where fixed carries a premium for certainty.
The driver is market expectation of eventual cuts within the fixed term, which lets lenders price fixed funding more cheaply. For borrowers, it means the reflexive assumption that “fixed costs more” is currently wrong at some lenders, and worth actually checking rather than assuming. See fixed vs variable for how to weigh it.
What’s tightened
- High-LVR investment lending remains conservative at several majors, unchanged from July
- Some July new-financial-year promotional pricing has quietly expired without replacement
- Serviceability assessment on multiple-property portfolios stays tight, with buffers applied firmly as portfolios grow
What’s loosened
- Non-bank competition on investment lending continues, keeping pressure on the majors
- Construction lending shows continued tentative improvement from the tight conditions earlier in the year, though it remains selective
- Self-employed investor assessment continues to improve at a small number of lenders
One story worth knowing this month
The ACT stamp duty abolition is starting to produce observable effects. Since 1 July, eligible ACT first home buyers pay no conveyance duty regardless of income or property value, removing what was often a $20,000-plus upfront cost.
Early indications point to increased first-home-buyer enquiry and activity, concentrated where you’d expect: entry-level and mid-range price points. For investors, that’s the segment where competition is likely to firm first. It doesn’t change the fundamentals of a good investment purchase, but it does mean investors shopping the same stock as first home buyers may find the competitive dynamic shifting.
It’s still early, one full quarter of data will tell a clearer story. But the direction is worth factoring into timing decisions, particularly for investors buying entry-level stock.
What Canberra investors should be asking this month
- “Given rates look stable, does fixing still make sense for me?” With holds expected through 2026, the case for fixing is now more about personal certainty than rate protection.
- “Have I actually checked fixed versus variable pricing?” The inversion means the usual assumption may not hold at your lender.
- “Is first-home-buyer competition affecting the stock I’m targeting?” Particularly relevant at entry-level price points post-1 July.
- “How is my portfolio serviceability tracking under current buffers?” Multiple-property assessment remains tight.
Coming in September’s Brief
Volume 5 will cover the first full quarter of post-stamp-duty-abolition data in the ACT, spring selling season lender positioning, and whether the construction-lending improvement has held.
The Brief lands monthly, on the last Friday of each month.
The practical read for August
If there’s a single theme this month, it’s that the urgency has drained out of rate decisions. Through the first half of 2026, the question was whether to move before the next rise. With three holds behind us and economists expecting stability through year-end, that pressure has eased. What replaces it is a more ordinary set of questions: is your rate competitive against current pricing, is your structure right for your portfolio, and are you positioned for the segment you’re buying in. Those are better questions to be asking than “should I rush,” and August is a reasonable month to work through them without a clock running.
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Frequently Asked Questions
Q1. What is the RBA cash rate in August 2026?
Ans. 4.35%. The RBA held at its August meeting, following holds in June and July, after three increases earlier in 2026 took the rate from 3.60% to 4.35%. The next Board meeting will determine whether that stability continues.
Q2. Are interest rates expected to rise or fall?
Ans. Economists broadly expect the RBA to hold for the remainder of 2026, with cuts not anticipated until 2027. Growth is slowing and inflation easing, but inflation remains above the target band.
Q3. Why are some fixed rates lower than variable rates?
Ans. Markets expect eventual rate cuts within the fixed term, which lets lenders price fixed funding more cheaply. It’s an inversion of the usual relationship and worth checking rather than assuming.
Q4. Should I fix my rate now?
Ans. With rates expected to hold, the case for fixing is more about personal certainty than protection from imminent rises. It depends on your budget, plans, and whether you value repayment stability.
Q5. How is the ACT stamp duty change affecting the market?
Ans. Early signs point to increased first-home-buyer enquiry at entry-level and mid-range price points, since eligible buyers no longer face a $20,000-plus duty bill. A full quarter of data will clarify.
Q6. Is construction lending easing?
Ans. It continues to show tentative improvement from earlier tight conditions, but remains selective. It’s a gradual trend rather than a decisive shift.
Q7. Is high-LVR investment lending still tight?
Ans. Yes, several majors remain conservative on high-LVR investor files, unchanged from July. Non-bank lenders continue to provide competitive alternatives.
Q8. Does the Lender Brief name specific lenders?
Ans. No, that requires personal advice and a full file assessment. The Brief reports observed market behaviour; a strategy call confirms which movements apply to your situation.
Q9. What should investors watch in the coming months?
Ans. Whether first-home-buyer competition firms entry-level prices, whether construction lending continues improving, and spring selling season lender positioning.
Q10. How do I get the Lender Brief each month?
Ans. It publishes on the last Friday of each month. Subscribe via the contact form to get it direct to your inbox.
This Brief is general market commentary, not personal advice. Lender policies, rates and offers change frequently, confirm current positions before relying on any specific figure. Individual lender treatment will vary by file. For advice specific to your circumstances, book a call with Harbir Hundal, Credit Representative 506564 of BLSSA Pty Ltd ACN 117 651 760, Australian Credit Licence 391237.