The RBA's Financial Stability Review lands on 1 October, two days after a rate rise, and while its contents are not yet known, household resilience is a question worth watching.

The timing is hard to ignore. On Tuesday 29 September 2026, the Reserve Bank of Australia's Monetary Policy Board lifted the cash rate target by 25 basis points to 4.60%, effective today. Tomorrow, Thursday 1 October, the RBA is scheduled to publish its Financial Stability Review (FSR), the twice-yearly report in which it assesses risks to the stability of Australia's financial system.

What the October FSR will say is not yet known, and any claim to the contrary would be guesswork. The last edition was published on 19 March 2026. What can be said is what the FSR typically covers, and which questions about households look most pressing given what the RBA has said in the past week. This article sets out those questions as things to watch, not as predictions.

What the FSR is, and what it usually covers

The Financial Stability Review is different from the RBA's monetary policy communications. Monetary policy is about inflation and employment, and the tool is the cash rate. Financial stability is about whether the financial system, meaning banks, other lenders, markets and the infrastructure connecting them, can keep functioning through shocks without amplifying them.

The FSR typically examines:

  • households, including debt, repayment capacity and financial buffers;
  • businesses, including profitability, debt and insolvencies;
  • banks, including capital, liquidity and asset quality;
  • non-bank lenders and other parts of the financial system;
  • global risks that could spill over into Australia.

Household resilience features prominently because housing debt is a large part of the Australian financial system. If many households struggled to meet repayments at once, the effects could flow through to lenders and the wider economy. The FSR is where the RBA usually explains how it sees that risk.

The household backdrop the RBA has already described

The RBA has given a fair amount of information about household conditions in its recent communications, even if the FSR itself is still to come.

At her media conference on 29 September, Governor Michele Bullock said scheduled mortgage payments are "back up sort of around 10 per cent" of household disposable income. Put simply, roughly one dollar in every ten of household disposable income is going on scheduled mortgage payments.

She also acknowledged the strain directly: "I know this decision is difficult for households with a mortgage and businesses." On the cost of living, she said "Pay packets don't go as far as they used to" and "Every household has seen how the price of everything has gone up in recent years."

Inflation remains the reason for the pressure. Headline inflation was 4.0% over the year to August on the monthly CPI indicator, while Governor Bullock said the underlying inflation rate has "been about 3.5 per cent for the past six months", both above the 2–3% target. The Board's statement said "inflation remains elevated" and that it "will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed."

As an illustration only, not RBA data: a 25 basis point rise on a hypothetical $600,000 loan adds about $1,500 a year in interest, or roughly $125 a month before amortisation effects. How much any household feels that depends on its loan size, income and buffers.

Jobs and housing: the two big supports

For household resilience, employment is usually the most important safeguard. Borrowers with steady incomes can generally keep paying even when repayments rise, while job loss is a common trigger for financial stress.

Here the RBA's messages are mixed but not alarming. Governor Bullock said "the unemployment rate has risen from 3.5 per cent over the past couple of years to 4.6 per cent", but described it as "still quite low historically", noting "over a million jobs created". Monetary Policy Board member Iain Ross, in a speech on 22 September, cited an unemployment rate of 4.5% in July 2026, up from 4.2% a year earlier. The Board's statement described labour market conditions as having "eased broadly as expected in recent months", with leading indicators "broadly stable". On recession, the Governor said: "That is not our central base case at this moment."

Housing is the other support. Rising property values build equity, which can give borrowers and lenders a cushion. Governor Bullock said "the housing market has turned down a little bit", while also noting "We do have a structural under supply of housing." How the FSR treats housing prices and household equity will be worth watching.

Questions to bring to the FSR

Because the October FSR has not yet been published, the most useful approach is to read it with specific questions in mind:

  • How does the RBA characterise the share of households under pressure from higher repayments and living costs?
  • Does it comment on household savings buffers, and whether they are being drawn down?
  • What does it say about mortgage arrears, and whether they are rising?
  • How does it assess the effect of a softer housing market on borrower equity and lender risk?
  • Does it identify any groups of borrowers as more vulnerable than others?
  • How does it view the resilience of banks and non-bank lenders to a deterioration in household finances?
  • What global risks does it highlight, given the Board's statement that the Middle East conflict has "broadened" and remains "unresolved"?

The Board has already flagged scenarios in which inflation could be higher and activity lower than forecast. The FSR is where the RBA may explore what such outcomes could mean for financial stability, though the report's scope and conclusions will only be clear once it is published.

The bottom line

Tomorrow's Financial Stability Review arrives at a sensitive moment: two days after a rate rise, with scheduled mortgage payments at around 10% of household disposable income, unemployment higher than a couple of years ago but still low historically and the housing market turning down a little. Its contents are not yet known, and it would be premature to anticipate its findings. But for anyone interested in how Australian households are coping, the questions it may answer about buffers, arrears, housing equity and lender resilience are among the most important the RBA will address this year.