Two rate hikes in two months. The cash rate is at 4.10 per cent and CBA, NAB and Westpac are all tipping another rise in May that would push it to 4.35 per cent. If you're buying property or sitting on a variable loan, the window to act is shorter than it looks.
Where we are right now
The RBA hiked in February and again in March, taking the cash rate from 3.60 per cent to 4.10 per cent in eight weeks. The trigger was persistent inflation compounded by an oil price spike from the Middle East conflict. Headline inflation is still running above the RBA's 2-3 per cent target band.
Three of the four major banks now expect a third hike in May. NAB is the most direct, warning that further rises are possible if inflation stays stubborn. CBA and Westpac describe May as likely but not guaranteed. ANZ is the outlier, expecting a hold.
A May hike would put the cash rate at 4.35 per cent, matching the peak of the last tightening cycle. The difference this time: the cuts that came before were shallow and have already been reversed.
What another 25 basis points actually means
Each quarter-point rise reduces borrowing capacity by roughly $25,000. If May delivers, a doctor who borrowed at full capacity in January has had their ceiling trimmed by about $75,000 across three consecutive hikes.
On a $900,000 variable loan, the move from 3.60 to 4.35 per cent adds approximately $400 to monthly repayments compared to January. For a $1.5 million loan, that's closer to $680 per month.
Those numbers matter because doctors often borrow at the upper end of their capacity to access better properties in stronger markets. When rates move quickly, the gap between approved and actually affordable can close fast.
Three things to do before the May decision
Check your pre-approval if you got one recently. Pre-approvals typically last 90 days and are assessed at the rate environment when they were issued. If yours was issued in January or February, the serviceability buffer may no longer reflect your current limit. Don't assume last month's approval is still valid at its stated maximum.
Review your current rate. Variable rates have repriced unevenly across lenders during this cycle. Some banks moved faster than others, and doctor-specific lenders often carry separate rate cards that haven't followed the standard variable path. A broker comparison costs nothing and could identify material savings.
Stop waiting for rates to fall. That's been the wrong call twice already this year. The current consensus has rates peaking at 4.35 per cent before cuts resume in late 2026 at the earliest, but that forecast has shifted before. Property supply remains constrained in the markets most doctors want to buy into. Waiting for a cut to buy has a cost too.
Where medical professionals still have an edge
Regardless of the RBA's direction, the structural advantages of doctor lending haven't changed. Most lenders offering medico programs will still waive LMI up to 90-95 per cent LVR for eligible medical professionals. That means a specialist or GP doesn't need a 20 per cent deposit to avoid paying tens of thousands in lender's mortgage insurance.
That matters especially now because general buyers are being squeezed from both sides: higher rates reducing serviceability, and elevated prices requiring larger deposits. As a doctor, the LMI waiver partially offsets both pressures.
For more on what you specifically qualify for, including LVR limits and which lenders are most competitive for medical professionals right now, see our guide to home loans for Australian doctors.
Key takeaways
- CBA, NAB and Westpac all expect the RBA to lift the cash rate to 4.35 per cent in May
- Each 0.25 per cent hike reduces borrowing capacity by approximately $25,000
- Pre-approvals issued before March may need reassessment if you're near your borrowing ceiling
- Doctor LMI waivers up to 95 per cent LVR remain available regardless of the rate environment
- Waiting for rate cuts has been the wrong call twice in 2026. Act on fundamentals, not forecasts.
Want to know exactly where you stand before the May decision? Book a call with Voyage Financial and we'll run through your numbers.
General Advice Warning: The information in this article is general in nature and does not take into account your individual circumstances, financial situation, or goals. It was accurate at the time of publication and may not reflect current market conditions or legislation. This article should not be relied upon as a substitute for professional financial, legal, or tax advice. Always seek guidance from a licensed adviser before making financial decisions. Where information from third-party sources is referenced, it has been sourced from reputable outlets in good faith, but Voyage Financial cannot guarantee its ongoing accuracy.
