There’s been plenty in the news lately about property prices, interest rates and the announcement of new auction rules in Victoria. While the proposed laws aimed at addressing underquoting are being hotly debated, it's not slated to go to parliament until May 2026 and there's no guarantee it will be passed into law in its current form.
In this update we're focusing on the federal government’s 5% deposit scheme, and fixed vs variable rates in light of the RBA's likely hold on interest rates.
RBA Rates: Fixed vs Variable - What’s the smart move?
This quarter, Australians stayed laser-focused on what the Reserve Bank of Australia (RBA) are doing with the cash rate. One question we get asked a lot, especially with the RBA holding firm on rates, is should you fix, or stay variable?
Right now, the difference between variable and one-year fixed rates is minimal, while two-year fixed rates sit just above variable options. With the inflation spike up to 3.8% in October, we predict that the RBA will likely hold steady over the next 12 months rather than cutting rates, which was previously expected for early 2026.
So, what’s the takeaway?
For borrowers on the fence, variable rates may still offer the edge, at least while the gap between fixed and variable remains narrow.
First home buyers: How the 5% Deposit Scheme is shaping the market
If you’re looking to break into the market, the federal government’s 5% deposit scheme for first home buyers is a game changer. However, the scheme has dramatically increased property values in the popular sub-$1.5 million bracket. This is one of the main drivers behind recent inflation jump mentioned above.
Units and houses under $1m are the most common property types scooped up under the scheme, leading to significant price uplifts. Higher-value properties north of $1.5 million are seeing steadier, more modest growth.
Is the 5% Deposit Scheme right for you?
The 5% deposit scheme is a unique opportunity for those earning well and ready to make a move.
Let’s break it down: if you’ve got $110,000 saved (roughly 5% deposit plus costs like stamp duty) and a solid income to support repayments, you’re now in a good position to buy a house around the $1m mark. Speak to a mortgage broker to learn more and get a pre-approval.
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