Market Update — April 2026: What First Home Buyers Need to Know Right Now
There's a lot happening at the moment. There's been another interest rate rise, there's global uncertainty with conflict overseas, fuel and supply issues, and there's a federal budget just around the corner.
If you're a first home buyer, you might be wondering what all of this actually means for you and your plans.
So in this resource, we wanted to sit down and talk through it all:
What's actually going on in the market right now
What the latest rate rise means for repayments and borrowing capacity
Fixed, variable, or split: a quick refresher on your options
What first home buyers should focus on right now (a three-step plan)
This resource supports Episode 33 of the First Home Unlocked Podcast: Unlocking Rising Rates, Market Uncertainty and What It Means for First Home Buyers
How We're Feeling About Everything Right Now
Chris has been through a lot over the years. He started back in financial advice all the way back in 2007, so he's been through GFCs, European debt crises, royal commissions, and massive increases in interest rates and inflation. So it does feel like another crisis. But every time when you're in a crisis, it does feel like this one's different and that's what uncertainty is. No one knows how things are going to play out.
What you should do as a first home buyer may be different than what an investor should do or what an upgrader should do.
There's a big world out there. There's lots happening that you can't control, there's things that you can control and that's your own personal decisions and how you respond to it.
What's Actually Going On in the Market Right Now?
Something we're hearing from a lot of first home buyers at the moment is that they're feeling a bit uncertain, which is completely understandable with everything that's going on. But what are we actually seeing in the market right now?
Putting It in Context
If we wind it all the way back to October last year, we had a surprise with where inflation was going. We all thought that the inflation genie was back in the bottle, and it's really important for governments to control inflation because it can lead to this wage spiral. They thought they had it in the bag, but it sort of spiked late last year.
So the expectations around interest rates, not just here but also around the world, where everyone thought they had it under control, has sort of shifted. We had to go from expecting rate cuts to having increased rates maybe a couple of times since late last year and there was an expectation of an early rate rise this year, which is a big shift.
Did that mean first home buyers coming into 2026 didn't want to buy? Not from what we are seeing, they realised that the rental market hasn't got good fundamentals. It's gone up a lot over the last five years. Chris thinks the real issues happened in the last month or so with Iran. And obviously that's been a huge impact on how this is going to play out and increase inflation a lot.
But the biggest part of the market is there are about seven-plus million homeowners out there that often will just sit on their hands and say, "Well, I don't know what's going to play out. Yes, I would love a different place, or maybe I'm happy here, or I love it. I'm just going to let this play out. I don't need to move. I don't want to sell and then go into the rental market because that's not good. And also the market could run on me."
So what you're going to see is a lot of people who don't have to sell won't sell. They'll just sit on their hands.
What This Means for Supply
Sellers are sitting on their hands, and listings are staying tight through 2026.
When people don't have to sell, they won't. They'll just wait it out and because there's uncertainty right now, a lot of homeowners who might have otherwise upgraded or downsized are choosing to stay put. This means fewer properties are coming onto the market, which keeps supply tight.
Investors are exiting the apartment market.
With the upcoming budget changes potentially targeting negative gearing and capital gains tax, a lot of investors are feeling anxious. They're looking at their apartment investments and thinking, if I can sell this and get a good price, I'd rather just bank that money. So we're likely to see more investor-owned apartments coming onto the market over the next 12 months, which creates more options for first home buyers at that price point.
Rental market fear is driving first home buyers to act anyway.
Even with all the uncertainty around rates and the economy, first home buyers are still moving forward because the rental market hasn't improved. Rents have gone up significantly over the last five years, and there's no sign of that easing. So for many first home buyers, the motivation to get out of the rental market and into their own home is still strong, even when the broader market feels uncertain.
Should First Home Buyers Keep Moving Forward With Their Plans?
This is going to be case by case. You've got to be really careful when you're a first-time buyer. All the things we've spoken about for many episodes around making sure it's a long runway for you, making sure it's a good asset, that's more relevant than it has ever been really.
The Key Takeaway
What matters is going in with your eyes open. Understanding your cash flow and having the right protections in place so you're buying with confidence.
This is where speaking to us early makes a real difference. We can help you stress-test your budget, work out what's realistic for your situation, and make sure you're set up with the right buffers and protections from day one.
You can Book a Get to Know You Chat and we'll walk through your situation together.
Rates Have Moved Again But What Does That Actually Mean?
There's been another interest rate change since we last did one of these updates, with rates increasing by 0.25% and we know from the conversations we've been having with first home buyers that rate changes do bring up a lot of questions.
The first thing we always come back to is rate changes are a completely normal part of having a mortgage.
What matters more than trying to predict where rates go next is making sure your plan can handle that movement.
That means:
Building buffers in from the start
Borrowing within your comfort zone, not just your maximum amount
The Practical Impact
Just to give you a quick sense of what a rate change actually means in real terms, let's look at the impact on two things: your repayments, and your borrowing capacity.
Repayments
If you've got an $800,000 loan and your rate moves up by 0.25% with a 30 year loan term, your minimum monthly repayment increases by around $126 a month.
This is why we talk about building a buffer into your budget from day one, so if rates are rising, it's something you've already got the flexibility for.
Borrowing Capacity
A rate rise typically reduces the maximum a lender will allow you to borrow. For example a couple each earning $90,000 with no debts and no dependents, a 0.25% rate increase reduces borrowing power by around $22,000.
The exact figure will be different based on your individual circumstances and across each lender.
Chris's Advice on Rate Rises
There are two ways to think about it. One is the impact on you. But it's also: what does it do to other buyers?
Because if it scares a lot of other first home buyers off, it means that when you go to the open home, there's less people there and potentially there are more investors selling.
This is actually what you want. This is creating more of a buyer's market than a seller's market.
Fixed, Variable, or Split
Let’s now talk about one of the most common questions we're getting from first home buyers at the moment, which is around fixing their interest rate. First a quick refresher on what your options are, including variable rates, fixed rates, or a split loan.
Variable Rate
A variable rate moves up or down over time. It's the most common option for first home buyers because of the flexibility it gives you:
Unlimited extra repayments
Access to features like an offset account or redraw
No break costs if you want to refinance later
The trade-off is that if rates rise, your repayments go up too, so you need buffers in place.
Fixed Rate
A fixed rate locks in your interest rate for a set period, usually one to five years. Your repayments stay the same the whole time, which makes budgeting really straightforward.
The downside is that:
You usually can't use an offset account or make extra repayments to your redraw
If you want to exit early (whether that's to refinance or sell), you'll likely face break costs
And importantly, if rates fall while you're fixed, you stay on your higher rate until the term ends. You don't get to benefit from the drop
Split Loan
A split loan is a combination of both: part fixed, part variable, so you get some certainty on one portion while keeping flexibility on the other.
Chris's Take: Fixed vs Variable Right Now
The first thing is really just trying to figure out: is there a real comfort factor for you as a new mortgage holder to know that rates aren't going to keep going up on you and affect your loan dramatically?
So if you are really concerned about that, you're not as confident on how potentially pay rises or bonuses work, or you really are concerned if rates go up it's going to hurt you, then potentially just regardless of what rate happens, the peace of mind knowing that you don't have to stress for maybe 50, 60, or 70% of your mortgage repayment could be a real big deal for you.
Avoid fixing a small portion (10 or 20 or 30%). So if you are going to fix, you're most likely probably better off to fix at least half, if not more, because otherwise the benefit isn't that great and it locks you into a lender for something that's not that great.
Secondly, you've just got to be careful that the fixed rate you're paying is competitive in the broader market. There are big differences between bank to bank on fixed rates.
So just be careful on that. But it really comes down to just your confidence level and just what will give you the most comfort.
Now, if it doesn't play out, let's say you fix half of it and then rates don't go up and then rates go down, you might go, "Yeah, I could have potentially saved some money," but you've got a benefit for it, you got that comfort.
It's all about that protection and that buffer. And as Chris said, it's case to case. So we can definitely help you out with that, have a chat through your situation and what it would look like and what puts you in the best position and that sleep-at-night factor is so important.
What First Home Buyers Should Focus On Right Now
With all of that as context, we want to give you something really practical to take away from this resource because no matter what the market's doing externally, there are things you can control and we're going to look at it as a three-step plan:
Step 1: Get Clear on Your Goals and Vision
What do you actually want this first property to do for you?
How can you choose a home that's going to last you for the next 5 to 10 years?
Are there life changes coming up that the property needs to work around over the next 5 to 10 years?
We've linked our Goals and Vision Workbook here. It helps you get really clear on the questions to ask yourself before you start looking at properties.
Step 2: Speak to Us Early and Get a Plan in Place
Don't wait until you think you're ready. Come and have a conversation first. We'll show you what's actually possible for your situation, which pathways make sense, and what you'll need to save.
This gives you an informed action plan so you can move forward feeling clear and confident about what's next.
Step 3: Build Protection Into Your Plan From the Start
Something we always recommend for First Home Buyers is to build an emergency fund, ideally sitting in your offset account.
When you're taking on a mortgage, you need to make sure your repayments are manageable if rates increase. You really want to understand your cash flow and build flexibility in from the start.
Final Thoughts
If everything going on in the market right now has made you feel a bit uncertain about your first home plans, that's completely understandable.
What matters most is having a plan that's built around your goals, your budget, and what's comfortable for you.
If you want to talk things through, you can Book a Get to Know You Chat with us. We'll help you slow things down, work out where you actually stand, and map out what your next step looks like.
