Right, so the RBA did it again. On 5 May 2026, the cash rate went up another 25 basis points to 4.35%. That’s the third hike this year, which means most of last year’s rate cuts have been wiped out in about four months.
If you’ve got a mortgage, you’re going to feel this one. If you’re renting, you’ll probably feel it too once landlords start passing it on. And if you’re trying to budget for a household with kids, a car, three streaming subscriptions you forgot about, and the weekly Coles run, the squeeze just got tighter.
What actually happened
The board voted 8 to 1 to raise rates. The reasons given were familiar ones: inflation jumped to 4.6% in the year to March, fuel prices are up because of the conflict in the Middle East, and capacity pressures in the economy are still sitting above where they’d like them to be.
If you want the official version, the RBA media release spells it out. The short version: they think inflation is going to stay above target for longer than they hoped, so they’ve put rates up to slow things down.
What this means in dollars
Let’s do the maths in a way your bank statement will recognise.
For an $850,000 mortgage on a typical variable rate, a 25 basis point hike adds roughly $130 a month to your repayment. That’s not catastrophic on its own. But this is the third hike in a row, so since February, the same loan is now costing you about $400 a month more. Across a year, that’s nearly $4,800 you didn’t budget for.
For a $1.2 million loan, scale those numbers up by about 40%. That’s a holiday’s worth of cashflow gone, just on the higher repayment.
And the flow-on effects are real. Rents go up. Food prices stay sticky because logistics and energy cost more. Even the cost of running your car is higher because fuel is one of the main reasons we got here.
Why we built Funance
Honestly, this is one of the main reasons Funance exists. I’m not a financial adviser. I’m a guy in Melbourne with four kids, a mortgage, and a partner, who got tired of trying to plan around stuff like this with a half-broken spreadsheet.
The thing the news doesn’t tell you is what to do about it. Every news outlet today will run the same headline. None of them will help you work out whether you can afford the new repayment, or what to cut to make it work, or whether you should be putting extra on the loan now to get ahead of it.
That’s what Funance is for. Specifically:
- The Budget tab shows you, line by line, where your money’s actually going each month. Not categories the bank made up. Categories that match your life.
- The Debts tab lets you model what an extra $200 a month does to your loan timeline. Spoiler, it usually shaves years off, especially with rates this high.
- The Subscriptions tab (Pro) is where most people find their first easy win. We’ve had test users find $40 to $60 a month in stuff they’d forgotten about. That’s not life changing on its own, but it puts a real dent in a $130 hike.
- The Scenarios tab (Pro) lets you stress-test rate rises before they happen. You can model another 25bp hike, another 50bp, you can model rates going back down too. The point is to take the guesswork out.
The boring advice that actually works
If you don’t want to download anything, here’s what I’d be doing this week.
First, log in to your bank app and check what your new repayment is. Most banks update this within 2 to 3 weeks of an RBA decision. Some are slower. Either way, find the new number and write it down.
Second, look at the gap between that and your current repayment. Find that money somewhere in your budget. Subscriptions are the easiest place to start. Then food, then transport, then everything else.
Third, if you’ve got an offset account or a redraw facility, this is the time to be feeding it. Every dollar in offset saves you 4.35% guaranteed, which is better than what most savings accounts pay.
And fourth, don’t panic. Rate cycles run in both directions. We’ve been here before, we’ll be here again, and the people who get through it are the ones who know their numbers.
What’s coming next for Funance
This kind of news is exactly the moment when a tool like Funance earns its keep. Right now we’re focused on the core household planning features. But there’s a lot more on the way.
The next round of features is going to focus on saving money on everyday stuff. Think energy plan comparisons, insurance reviews, telco optimisation. The kind of thing that takes you a Saturday to research and most people never get around to. We want Funance to do the legwork and tell you, in plain English, where your $50 a month is hiding.
If that sounds useful, the best way to support it is to actually use the app and tell us what’s missing. Replies to any Funance email come straight to me.
Stay calm, run your numbers, and make the small wins where you can. The macro stuff is out of your control. The next $50 a month isn’t.