The Reserve Bank of Australia left the cash rate unchanged at 4.35 per cent at its June 2026 meeting. This follows three rate rises earlier this year in February, March and May.
The Reserve Bank described the decision as a pause rather than a turning point. It also indicated that further rate increases remain possible if inflation does not continue to ease.
At the same time, the Federal Budget delivered significant changes for property investors. These reforms could affect the timing of future investment property purchases and the tax benefits available.
Federal Budget Changes for Property Investors
The Federal Budget handed down in May 2026 confirmed major changes to negative gearing and capital gains tax for future property investors.
Negative Gearing Changes
Negative gearing on established residential properties will be abolished from 1 July 2027 for properties purchased after 7.30 pm on 12 May 2026.
Existing property owners and buyers who had already exchanged contracts before the announcement are protected under grandfathering provisions.
Capital Gains Tax Changes
The current 50 per cent Capital Gains Tax discount will be replaced with a new inflation-based discount. In addition, a minimum 30 per cent tax on capital gains will apply from the same date.
New Build Properties Remain Exempt
Investors purchasing eligible new-build properties can still access negative gearing and the current Capital Gains Tax discount under the proposed rules.
What This Means for Home Buyers
For owner occupiers, a steady cash rate means your current mortgage repayments are unlikely to change in the short term.
However, this should not be interpreted as the beginning of a rate-cutting cycle. The Reserve Bank has made it clear that further increases remain possible if inflation stays above its target range.
If you have a variable rate home loan, now is a good time to review your loan and ensure it still meets your needs.
What This Means for Refinancing
Lenders are actively competing for new customers.
Refinancing could help you:
Access a Lower Interest Rate
A lower interest rate may reduce your monthly repayments or help you pay off your loan sooner.
Reduce Fees
Some lenders are offering lower ongoing fees or cashback-style incentives, depending on eligibility.
Access Better Loan Features
You may benefit from features such as:
- Offset accounts
- Redraw facilities
- Flexible repayment options
A home loan review can help determine whether your current loan remains competitive.
What This Means for Property Investors
Timing has become increasingly important for property investors.
Buying an established investment property before 1 July 2027 may allow eligible investors to retain negative gearing and the current Capital Gains Tax treatment under the grandfathering provisions.
New build properties also remain attractive because they continue to qualify for existing tax concessions under the proposed changes.
Every borrower’s circumstances are different. Before making any investment decision, seek advice from a licensed mortgage broker and your qualified tax adviser.
Will My Borrowing Power Change?
Your borrowing power does not automatically change simply because the Reserve Bank left the cash rate unchanged.
Lenders assess each application using their own:
- Serviceability buffers
- Living expense benchmarks
- Credit policies
- Income assessment methods
These lending policies can change independently of the official cash rate.
The most accurate way to understand your current borrowing capacity is to obtain an updated assessment from a mortgage broker.
How Laxmi Home Loans Can Help
Laxmi Home Loans works with more than 20 lenders, including the major banks and specialist lenders such as Pepper Money and Liberty.
We compare:
- Interest rates
- Fees
- Loan features
- Lending policies
Whether you are:
- Buying your first home
- Refinancing your existing loan
- Purchasing an investment property
- Planning ahead before the proposed negative gearing changes
Our team can help you understand your options and recommend a loan structure that aligns with your financial goals.
Speak With Laxmi Home Loans
Whether you are buying your first home, refinancing or investing, getting the right advice early can help you make informed decisions in a changing market.
Contact Laxmi Home Loans today to discuss your borrowing capacity and explore home loan options tailored to your circumstances.
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