Reserve Bank governor Michelle Bullock’s latest rate hike call will cut the access the average Victorian borrower has to more than 50 suburbs.
Victoria’s average house hunter will be priced out of 55 suburbs after yesterday’s Reserve Bank interest rate hike.
The huge cut off includes dozens of Melbourne suburbs including many once known for their affordability including Doreen, Cranbourne South, Noble Park, Caroline Springs, Heidelberg West and South Morang.
For the state’s $664,000 average home loan, a figure last released by the Australian Bureau of Statistics in June, two rate hikes in as many months would have cut borrowers who were looking at that sum as their maximum down to just $630,000 — according to the federal government’s Money Smart mortgage calculator.
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For those with a 20 per cent deposit ready to go, the reduction in borrowing power means they have gone from being able to afford a home worth $830,000 to just $787,500 after the latest hike goes through.
Contrasted with realestate.com.au data this shows there were 458 suburbs and towns across the state where the median house price was within reach at the end of the last financial year, compared to 403 after the next hike is applied to their borrowing power.
For typically priced units, it works out to going from 356 areas within reach in June to 332 based on October median priced data.
Canstar projections on what the latest rate hike has done to the cost of your mortgage.
Mortgage Choice chief executive Alex Waldron said for those who already have a home loan, a $600,000 debt would shortly have repayments rise by $98 a month.
“On top of the September hike, that could be almost $180 per month extra in mortgage repayments,” Mr Waldron said.
“My advice to mortgage holders is that you should speak to your mortgage broker to see if your home loan is still competitive.
“If you’re looking to purchase a new property, I’d recommend chatting to a mortgage broker so they can help you put your best foot forward in a difficult economic landscape.”
Loan Market data has revealed that across October loan applications were down 31.6 per cent compared to 2025, with first-home buyer loan applications down by 33.6 per cent in the same timeline.
With a cut back in borrowing power, home values could be the next thing to suffer.
The team behind Everybody’s Home, a group seeking to ensure housing for all Australians, noted that the hike would also likely impact on renters — who would face rent hikes down the line as landlords tried to recoup costs.
“Everyday Australians are being pushed to the brink and another interest rate hike is going to make life even harder,” said spokesperson Maiy Azize.
“Our recent survey shows three in four Australians would have to cut back if their rent or mortgage rose by just $20 a week.”
Based on a $664,000 borrowing capacity in June, two rate hikes will have priced a buyer with a 20 per cent deposit out of these suburbs based on their October median house or unit value.
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