The Reserve Bank of Australia (RBA) raised the official cash rate by 0.25% on 17 March 2026, bringing it to 4.10% — the second consecutive hike following February’s increase, and the first back-to-back rise since mid-2023. If you’re an Australian living overseas or a non-resident looking to buy property in Australia, this decision has specific implications for your borrowing position that go beyond what resident borrowers face.

What Did the RBA Decide?

The RBA’s nine-member Monetary Policy Board voted five to four to raise the cash rate from 3.85% to 4.10%. All members agreed inflation remains too high — the split was purely over timing. The drivers were persistent underlying inflation, a tighter-than-expected labour market, above-potential economic growth, and energy price pressures from the Middle East conflict. Governor Michele Bullock flagged a material risk that inflation stays above the 2–3% target band for longer than forecast.

Markets are pricing in a roughly even chance of another 0.25% hike at the May 2026 meeting. The four members who voted to hold did so in a “hawkish” sense — they still expect further tightening will be necessary.

How Rate Rises Hit Expat Borrowers Harder

For resident borrowers, a rate hike primarily affects repayment amounts and borrowing capacity. For expat and non-resident borrowers, the impact is compounded by the way lenders assess foreign income.

Income Shading

Most Australian lenders that accept overseas income apply a shading factor — typically between 20% and 40% — when assessing foreign earnings for serviceability. This means if you earn the equivalent of AUD $200,000 overseas, a lender might only count AUD $120,000–$160,000 toward your loan repayment capacity.

With the cash rate now at 4.10% and lenders applying their standard assessment buffer (typically 3% above the actual rate), the floor rate used to assess your repayments is now sitting above 7%. The combination of a higher assessment rate and a reduced income base means your maximum borrowing capacity has fallen materially compared to 12 months ago.

LVR Restrictions

Many lenders have tightened their LVR (loan-to-value ratio) caps for non-resident and expat borrowers over the past year. Where resident borrowers can often access up to 95% LVR with lenders mortgage insurance, expat and non-resident borrowers are typically capped at 70–80% LVR depending on the lender and the nature of their income and visa status. This means you need a larger deposit — or more equity if refinancing — relative to a resident borrower buying the same property.

Lender Appetite

Not all lenders accept foreign income, and the pool of lenders willing to lend to non-residents or expats on Australian-based incomes is smaller than for resident borrowers. Importantly, lender appetite and policy in this space shifts regularly — some lenders that were competitive 6–12 months ago have tightened their criteria, while others have stepped up. Working with a specialist broker who actively monitors this space is the best way to ensure you’re not limiting yourself to the first lender you approach.

FIRB Considerations — Unchanged

The RBA’s decision does not affect Foreign Investment Review Board (FIRB) requirements. Non-residents and temporary residents still need FIRB approval before purchasing established residential property in Australia, and the associated application fees remain in place. For Australians living overseas temporarily (on a temporary working visa or similar), FIRB requirements depend on your specific visa status and the type of property you’re purchasing. If you’re unsure whether FIRB applies to your situation, we can walk you through this as part of a loan assessment.

The Currency Angle

For expats earning in USD, SGD, GBP, EUR or other major currencies, exchange rate movements can partially offset the impact of rate rises on affordability. The AUD has faced some pressure in recent months given global uncertainty — if you’re earning in a currency that has strengthened against the AUD, your effective purchasing power in the Australian property market may be higher than the headline numbers suggest. We factor current exchange rates into any borrowing capacity assessment we provide.

What This Means If You’re Planning to Buy

If you’re in the process of looking at Australian property from overseas, now is a good time to get a current borrowing capacity assessment. The numbers have moved since February’s hike, and they may move again in May. Understanding exactly what you can borrow now — and what scenarios look like if there’s one more hike — lets you shop with confidence rather than guessing.

Key things to address before you make an offer:

• Updated borrowing capacity based on current rates and your income currency
• Which lenders are currently most competitive for your situation (employment type, country of residence, income currency, LVR)
• Whether FIRB approval is required and the timeline involved
• Whether a pre-approval is appropriate given the pace of rate changes

What This Means If You Already Have an Australian Mortgage

If you already hold an Australian home loan and are on a variable rate, your lender will likely pass on the 0.25% increase within the next four weeks. On a $700,000 loan, that’s roughly $105–$110 added to monthly repayments on top of February’s increase. If your loan hasn’t been reviewed recently, it’s worth checking whether your current rate is still competitive — refinancing as an expat is possible, and there may be better rates available even within the current environment.

Talk to a Specialist

Expat and non-resident mortgage lending is a specialist area. The rules, lender policies and available products are different from what a standard broker or bank branch will offer you. At Expat Mortgage Broker, we work exclusively in this space and can give you a clear picture of where you stand after these rate changes.

Get in touch for an obligation-free assessment of your borrowing position.