Rates Are Higher. The Plan Still Holds.
With the latest RBA rate rise in 2026 and the federal Budget just days away, this week’s update from the HFI advisory team covers what higher rates, tax changes, and global market moves mean for you. Here’s what you need to know – and what, if anything, you should do about it.
Advisory Update · 11 May 2026
The Reserve Bank has raised rates three times this year, and the cash rate now sits at 4.35 per cent. This latest RBA rate rise in 2026 means Australia is playing catch-up after being slower than the rest of the world to move when inflation started rising. The pace feels sharp, but it’s worth stepping back and looking at what this actually means.
Historically, when you look back twenty or thirty years, rates have bounced between four and seven per cent whenever the economy was growing steadily and inflation was stable. We had an extraordinary period of extremely low rates, and there’s only one way to get back to normal from there – either incrementally or all at once. We’re going incrementally, which is uncomfortable to watch but not unexpected.
What matters more than the pace is that the direction has been consistent from the start of this cycle. The RBA signalled it early. The banks priced it in. Well-structured plans already account for it. So none of this is a shock, even if it doesn’t feel comfortable right now.
The federal budget lands on Tuesday night, and changes to capital gains tax and negative gearing are coming. These will take six to twelve months to work through the economy and the tax system, so they’re a future consideration rather than an immediate one. The government will raise some tax and spend it differently – that’s just what governments do. What matters for your plan is whether your direction is still the right one. It almost certainly is.
You’ll notice Wall Street has hit record highs this week while our market has fallen. That’s exactly why diversification works. When one geography struggles, others tend to perform. We’re positioned to benefit from that, and your portfolio reflects it.
We’re holding more cash than usual, and we’re accessing it when the plan requires it. This wasn’t a reaction to rates rising – it was always the plan. You’ve got the flexibility to make adjustments, and we have the resources to help you make them thoughtfully.
As always, if any of this raises a question about your situation specifically, please get in touch.
How the RBA rate rise in 2026 affects your financial plan
RBA rate rise in 2026 lifts interest rates to 4.35% – third increase this year
This RBA rate rise in 2026 lifted the cash rate by 0.25 percentage points on 5 May, taking it to 4.35 per cent – the highest level since February 2025. The board pointed to ongoing domestic inflation pressures and the flow-through of higher energy costs from the Middle East conflict. Major banks moved variable mortgage rates higher within days of the decision.
If you have a variable rate mortgage, your repayments have gone up again. If the pressure is building, it’s worth a conversation with us about what flexibility you have and whether your current structure still suits you.
Federal Budget on Tuesday – CGT and negative gearing changes confirmed
Treasurer Jim Chalmers will hand down the federal Budget on Tuesday 13 May. He confirmed over the weekend that changes to the 50 per cent capital gains tax discount and negative gearing are planned, describing both the housing market and the tax system as broken. Final detail has not been released, but the direction is clear and the decision is made.
These changes will take time to flow through and won’t affect most of our clients immediately. If you hold investment property or assets subject to CGT, we’ll be in touch once the specifics are known – don’t make any decisions before then.
Housing market cooling as higher rates reduce what buyers can borrow
Property data firm Cotality reported this week that demand is softening and price growth is slowing across mid-sized capital cities following the latest rate rise. Prospective buyers are revising their budgets and some are stepping back from the market. Real estate agents report increased hesitation, though underlying demand remains present.
If you’re thinking about buying or selling property this year, the market is shifting under your feet. It’s a good time to check that your numbers still work at current borrowing rates before committing.
CSL profit warning wipes a decade of share price gains – ASX falls
CSL, one of the largest companies on the ASX, downgraded its profit outlook on Friday and booked a $6.9 billion impairment. The stock fell sharply, dragging the ASX down 1.5 per cent on Friday and contributing to further falls Monday morning. In contrast, Wall Street hit fresh record highs last week, driven by strong corporate earnings and positive jobs data in the US.
A single large company moving sharply is exactly why diversification matters. Your portfolio isn’t riding on one stock or one market – and the difference between Wall Street and the ASX this week is a practical illustration of why.
Aged care patients stranded in hospitals – 35% surge in less than a year
New figures obtained by the ABC show the number of aged care patients unable to leave hospital despite being medically cleared has surged by more than 35 per cent in less than twelve months. Processing delays around in-home care packages mean patients are waiting in hospital, sometimes for weeks. The federal government has announced 5,000 additional aged care beds per year, but advocates say it falls short of what is needed.
For clients who are starting to think about future care arrangements, or helping a parent navigate the system right now, this is a real practical pressure. Aged care planning is something we can help you work through before it becomes urgent.
If anything in this update has raised a question about your own situation, please do not hesitate to get in touch. That is exactly what we are here for.
After the RBA rate rise in 2026 – what to do now
There’s a lot landing at once this week – rates, the Budget, markets moving in different directions. Our job is to make sure your plan isn’t unsettled by any of it.
If the RBA rate rise in 2026 or Tuesday night’s Budget raises a question about your situation, or if rising rates are putting pressure on your household, please reach out. You don’t need to wait for your next review to have that conversation.
You may also find these resources helpful:
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Opinions in this article are attributable to its author only and do not constitute financial advice. Any advice in this document is general in nature and does not take into account the objectives, financial situation or needs of any particular person. You should obtain financial or legal advice relevant to your circumstances before making investment decisions. Health & Finance Integrated takes no responsibility for, nor gives any endorsement or warranties in relation to any third-party information referred to herein.
Health & Finance Integrated is a Corporate Authorised Representative of Able Financial Services (ABN 27 646 319 164) AFSL 530596, Shop 6, 23 Hassall St, Parramatta 2150 NSW.
