'Like they don't care': RBA's fifth rate hike a huge blow to mortgage borrowers

The Reserve Bank's fifth interest rate hike this year will create more stress for households.

Those with large loan repayments, the unemployed and renters could struggle to stretch their budgets.

The RBA has indicated it is still concerned about rising inflation, meaning further interest rate hikes cannot be ruled out.

As a renter Laura Mayer is worried she won't be able to cope with Tuesday's Reserve Bank interest rate hike.

"For me, the fact of the matter is that my rent has gone up 32 per cent in a one-off increase this year," she said.

The Reserve Bank raised the cash rate by a quarter of a percentage point for the fifth time this year on Tuesday, taking the cash rate to 4.85 per cent.

"The cost of housing is a constant state of stress for me, and it currently affects every aspect of my life.

"I continually worry that I will be a lifelong renter, and I cannot see how it gets better without genuine government intervention."

Reserve Bank governor Michele Bullock expressed some sympathy for those on the wrong side of interest rate hikes at Tuesday's press conference.

"The fact that we've had this massive shock has meant that we're poorer and that's what people are feeling," she said.

New research from Canstar has found one in 10 mortgage customers will have trouble meeting their soon-to-be higher repayments, following the RBA's decision.

The interest rate comparison website surveyed borrowers, renters and those who own their own home outright.

As many as 10 per cent of borrowers surveyed said they would be unable to meet the higher repayments if today's cash rate hike materialised, while a further 28 per cent said meeting the increase would not be easy.

The financial pain isn't limited to borrowers, with the majority (68 per cent) of renters saying they were concerned about the impact of today's rate hike on their rent or living costs.

Sixty-year-old-mortgage borrower Lina Pugliese's job was recently made redundant, making her budget squeeze extra tight.

She told the ABC finding work was getting "really tough".

She also expressed concern the Reserve Bank did not care about her financial position and was more intent on reducing inflation.

"There seems to be an indifference coming from the RBA — almost like they don't care," Ms Pugliese said.

Tuesday's RBA interest rates decision was a split one: six members voted to increase the cash rate target; three members voted to leave the cash rate target unchanged at 4.60 per cent.

The reason for this, Michele Bullock said, was that board members were conscious of economic stress emerging.

"Those looking for a [rates on] hold [decision] were thinking that housing has reacted, the unemployment rate is drifting up … they felt that there were potential downside risks in these circumstances," she said.

But most board members saw fit to hike interest rates, and there may be more to come.

"As a result, given the elevated near-term inflation outlook and the likely ongoing global sources of inflationary pressure, my base case is that the RBA has at least one more shot in the locker," Betashares chief economist David Bassanese said.

In fact, two further rate hikes in the first half of next year can't be ruled out to ensure a decent slowing in domestic demand and containment of inflation expectations."

IT professional Stephen Macchia does not know what else he can cut back on to absorb higher mortgage repayments.

"What does the RBA expect us to do as costs are out of our control — we are all price takers for fuel, insurance, and food.

"There is no choice here — maybe there needs to be another instrument, like a variable portion of the GST or super to take money out of the economy."

The Reserve Bank's interest rate rise is tipping more Australians into financial distress, with calls about people missing mortgage repayments now making up a greater portion of calls to the National Debt Helpline.

Calls and chats to the National Debt Helpline reached 187,905 in the 12 months to the end of August 2026, up 11.76 per cent from 168,133 over the same period the year before, with a greater portion coming from people unable to make mortgage repayments or at risk of arrears.

More than 1.82 million borrowers could be in mortgage stress due to the Melbourne Cup Day rate rise, according to Roy Morgan data.

On Monday Westpac reported that it offered 42,000 financial hardship assistance and disaster relief packages during the year.

Commonwealth Bank recently revealed in its financial results that the lender had "provided more than 147,000 tailored payment arrangements for customers in need of support".

Vicki Staff works with Financial Counselling Australia (FCA) as the coordinator for the National Debt Helpline.

Ms Staff said the latest data showed more than four in 10 callers were in paid employment demonstrating that having a job was no guarantee of financial security.

Further, mortgage stress was making up a bigger proportion of people who were contacting the helpline.

"In the past where we've seen mortgage stress represent maybe 10 to 11 per cent of callers, we're now seeing it creep up to 14, 15 per cent of callers."

The Uniting Church has also seen a rise in people in need of financial assistance.

Spokeswoman Aileen Muldoon said most clients accessing Uniting's financial counselling services have household incomes below $50,000, but that "we are seeing more people in paid work whose income is no longer sufficient".