Key Highlights

  • Hunter said most borrowers entered this period with buffers such as offset savings and that the RBA is not seeing systemic mortgage stress.
  • The October Financial Stability Review found around 2 per cent of variable-rate owner-occupiers have a cash-flow shortfall, well below the 2024 peak.
  • RBA officials acknowledge the pain, with Hunter saying the tool is not pain-free but costs less than the alternatives.

On 60 Minutes, Assistant Governor (Economic) Sarah Hunter spoke directly to borrowers feeling the strain of four rate rises this year, arguing that the aim is lower inflation, not forced sales.

For many Australians with a home loan, 2026 has been a year of rising repayments. The Reserve Bank of Australia (RBA) has lifted the cash rate target four times, by a cumulative 100 basis points, to 4.60 per cent. So when Sarah Hunter, the RBA's Assistant Governor (Economic), sat down with 60 Minutes, the question of what the Bank's decisions mean for mortgage holders was never far away.

The interview, recorded on 21 October with interviewer Adam Hegarty and broadcast on 25 October 2026, produced one line in particular that speaks to borrowers' anxieties: "We're not trying to put people out of their homes."

This article looks at what Hunter said to mortgage holders, the evidence behind it, and what the RBA has acknowledged about the pain involved.

The intent behind the rate rises

Hunter framed the Bank's task around two challenges: an overseas oil shock, and excess domestic demand relative to what the economy can sustainably supply. Her argument was that higher interest rates are the tool for bringing the resulting inflation back down.

"We know that higher interest rates will bring inflation down," she said. She was equally clear that the Bank does not want inflation to linger: "We don't want to live with high inflation for a long time."

The point of the line about homes was to separate the goal from a feared side effect. The RBA's aim is to slow demand enough to bring inflation back to its 2–3 per cent target. It is not, in Hunter's account, to push households into distress. She also said: "We're not trying to achieve a sharp stop or a really big downturn or anything like that."

What the RBA says it is seeing

Hunter's reassurance was grounded in observations about borrowers' circumstances. She said most borrowers entered this period with buffers such as offset savings, and that the RBA is not seeing systemic mortgage stress. "We're not seeing signs of lots of people having to sell their home because that's putting them into financial stress," she said.

The Bank's Financial Stability Review (FSR), released on 1 October 2026, provides the detail behind that view. Among its findings:

  • Around 2 per cent of variable-rate owner-occupiers have a cash-flow shortfall, a share projected to stay a little under 2 per cent and well below its 2024 peak.
  • The median borrower can cover over a year of scheduled payments from buffers.
  • Less than 1 per cent of borrowers are estimated to be in negative equity.
  • Arrears of 90 days or more have increased a little over the year to date, to around pre-pandemic levels, and the share of borrowers in formal hardship has increased but remains low.

The FSR's summary was that "Most Australian households with mortgages remain well placed to manage more difficult conditions".

The costs, and a cooling housing market

Reassurance about the aggregate picture is not the same as saying no one is struggling, and RBA officials have been careful not to claim that. At her media conference following the 29 September decision, Governor Michele Bullock said: "Those who have mortgages, yes, this clearly impacts them and it hurts them." She added: "But at an individual level, yes, there are households that are hurting."

Hunter herself acknowledged the cost of the approach. "It's not pain-free, it's not costless, but the cost of it is less using interest rates than it would be using other tools," she said.

The Governor has also tied that pain back to the alternative of doing nothing. "High inflation hurts all Australians, especially the most vulnerable," she said in September, and "Pay packets don't go as far as they used to, and that's why we need to stop this high inflation."

Part of the transmission of higher rates is through the housing market, and Hunter said this is happening as intended. Higher rates are slowing housing, she said, and tax changes from the May budget are also having an effect.

Governor Bullock's 28 October opening statement to the Senate Economics Legislation Committee described the same trend: housing prices have fallen in most capital cities and new housing loans have declined, although prices remain around 50 per cent higher than in early 2020. She was emphatic, however, that "monetary policy does not target housing prices." She also said household financial stability risks are contained, with only a small share of borrowers in negative equity or severe repayment difficulty.

What comes next for borrowers

Hunter declined to signal the outcome of the Board's next meeting, on 2–3 November, with the decision due at 2.30 pm (AEDT) on 3 November. She did caution that oil-driven price pressure is still coming through, and that things will get "a little bit" worse before they improve.

Since the interview was recorded, the Australian Bureau of Statistics has reported September headline inflation of 4.3 per cent and trimmed mean (underlying) inflation of 3.6 per cent, both above the target range. The Board's most recent statement said it remains prepared to respond, "including increasing the cash rate target further if needed". Whether it does so in November is not yet known.

Lags are also relevant to borrowers. The Governor told senators the full effects of recent rate rises are yet to be felt, meaning some of the impact of this year's increases may still be flowing through to household budgets.

The bottom line

Hunter's message to mortgage holders was twofold: the RBA's rate rises are meant to bring down inflation rather than to force people from their homes, and the Bank's data do not show widespread distress sales or systemic mortgage stress. The FSR backs that with figures showing most borrowers have buffers, while acknowledging rising arrears and hardship from low levels.

At the same time, RBA officials accept that individual households are hurting. Borrowers may wish to understand their own buffers and repayment obligations, and to follow the 3 November decision and the Statement on Monetary Policy released alongside it.