Lender Rate Rises: How to Review Your Investment Loans One by One

Written by Ferns Finance. Last updated 13 October 2026.

If you own more than one investment property, a lender rate rise does not hit every loan the same way. Variable loans rise, interest-only repayments change with the interest charged, and fixed loans stay put until they expire. Falling property values can also quietly shrink the equity you were planning to use. The best response is to review your loans one by one, not as a single number.

After the RBA raised the cash rate on 29 September 2026, lenders have started raising variable rates on investment loans by around 0.25% p.a., with changes taking effect in the first half of October. This article is about what to do next, loan by loan.

Key takeaways

• Each loan reacts differently: variable principal and interest, variable interest-only and fixed loans all behave differently after a rise.
• A fixed loan that looks safe today can be the biggest jump later, when it rolls onto a variable rate.
• Cotality reports Brisbane dwelling values sit 5.4% below their May 2026 peak, which can reduce the equity you can access (Cotality, September 2026).
• Reviewing in a set order, starting with the nearest deadline, saves time and shows where the risk is.

Why does a rate rise affect each investment loan differently?

Because each loan has its own rate type, repayment type and structure. A variable principal and interest loan adjusts its minimum repayment. A variable interest-only loan changes the interest you pay each month. A fixed loan generally does not change during the fixed term, then moves to whatever the lender offers at expiry.

That is why a portfolio-level "my repayments went up by X" figure can hide the real risk. A loan with a short fixed term left, or an interest-only period about to end, may matter far more than the loan that has just risen by a small amount.

What does this look like across a portfolio? (Hypothetical example)

Say an investor holds three loans. These are illustrative figures only, not lender rates.

• Loan A: $620,000, variable, principal and interest over 30 years, moving from 6.50% to 6.75%. The repayment goes from about $3,919 to about $4,021 a month, roughly $102 more.
• Loan B: $450,000, variable, interest-only, moving from 6.75% to 7.00%. The monthly interest goes from about $2,531 to about $2,625, roughly $94 more.
• Loan C: $380,000, fixed at 5.50% on principal and interest, so no change today. The repayment stays at about $2,158 a month.

The rise adds about $196 a month across A and B, roughly $2,355 a year. But look at Loan C. If its fixed term ended and it moved to a variable rate of 7.00%, the repayment would be about $2,528, roughly $371 more a month, or $4,447 a year. That single rollover would be nearly twice the size of the current rise.

Is the rent covering the repayments?

Often not fully, which is why the cash flow test matters. Using the same hypothetical portfolio, say total rent is $1,850 a week, about $8,017 a month. Repayments before the rise total about $8,608 a month, a shortfall of roughly $591 before insurance, maintenance and rates. After the rise, the shortfall is about $787. If Loan C also rolled to 7.00%, the shortfall would be about $1,158.

Cotality reports gross yields below typical mortgage rates, so a gap between rent and repayments is common. What matters is knowing the size of the gap and where the money comes from.

What happens to my equity when values fall?

Usable equity can shrink even if you have not touched your loan. Lenders commonly allow borrowing up to 80% of a property's value, subject to serviceability. As a hypothetical example, a property valued at $1,000,000 with a $600,000 loan has about $200,000 of potentially usable equity (80% of $1,000,000 is $800,000, minus $600,000). If the value fell 5.4% to about $946,000, 80% of that is about $756,800, which leaves about $156,800. That is roughly $43,200 less.

Brisbane dwelling values are 5.4% below their May 2026 peak, but local results vary, so a current valuation is the only way to know where you stand. Whether you can actually use equity also depends on your income, other debts and the serviceability test, which banks and other APRA-regulated lenders run at 3 percentage points above the loan rate (APRA, 28 May 2026).

Which investment loan should I review first?

Start with the loan where a change would hurt most, then work down. A simple order is:

1. Fixed expiry dates in the next six months. These carry the biggest rollover jump.
2. Interest-only periods ending soon. When the period ends, repayments typically rise because you start repaying principal.
3. The largest balance. A small rate gap on a big loan costs more.
4. The highest rate. This is often the easiest to improve.
5. Loans linked together as security. Changing one can affect the others, so check the structure first.

Can I change one loan without affecting the rest?

Often, but it depends on how your loans are structured. If loans are linked together as security, a change to one can affect the others. If they are set up separately, one refinance can often stand on its own. Check the structure before you rule anything in or out. This is one of the first things we look at in a portfolio review.

How can I build a buffer?

A buffer gives you time. An offset account or redraw balance can absorb a rise without forcing a sale. Some investors keep several months of shortfall in cash. Others check which loans have extra repayments built in and whether those could be paused if they need the cash. The right buffer depends on your numbers and your comfort with risk. Speak to your accountant about the tax side of any change, including how the 2026 Budget changes to negative gearing and capital gains tax apply to the properties you hold.

Next steps: things you can do this week

1. List every loan. Balance, rate, rate type, repayment type and lender for each.
2. Mark the dates. Fixed expiry dates and interest-only end dates.
3. Check for lender notices. Look for emails or letters about a rate change.
4. Stress-test the cash flow. Run the portfolio at 1.00 percentage point higher.
5. Get current valuations. Out-of-date values can overstate your usable equity.
6. Book a portfolio review. We can compare options across our lender panel.

Planning your next move? Let's talk.

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See investment loans and our loan comparison calculator.

Common questions

Do lender rate rises apply to investment loans as well as owner-occupier loans?

Yes. Lenders that have raised variable rates after the RBA's 29 September 2026 decision have generally applied rises of around 0.25% p.a. to investment loans as well, though details differ by lender. Check your lender's notice for the new rate, the effective date and any change to your repayment.

Which investment loan should I review first after a rate rise?

Start with the loan carrying the biggest risk: a fixed term ending within six months, an interest-only period about to end, or the largest balance. These can change your repayments more than the current rise. Then work down to your highest-rate loans and any loans linked together as security.

What happens when the fixed rate on an investment loan expires?

The loan usually moves to the lender's variable rate, which may be higher than your fixed rate. As a hypothetical example, a $380,000 loan moving from 5.50% fixed to 7.00% variable would cost about $371 more a month. Check your expiry date and compare options before the rollover.

How does a falling property value affect my equity for the next purchase?

Lenders commonly allow borrowing up to 80% of a property's value, so lower values mean less usable equity. As a hypothetical example, a $1,000,000 property with a $600,000 loan drops from about $200,000 of usable equity to about $156,800 after a 5.4% fall. A current valuation shows your real figure.

Can I refinance one investment loan without affecting my other properties?

Often yes, but it depends on how the loans are structured. If your loans are linked together as security, changing one can affect the others. If they are set up separately, one refinance can often stand on its own. A broker can check your structure before you decide.

How often should I review my investment loans?

There is no single rule, but many investors review at least once a year, and again after events like an RBA change, a lender rate rise or a fixed expiry. Reviewing on a schedule, not only when something goes wrong, helps you spot changes in rates, valuations and lender policy early.

General information only. This article is general educational content and is not financial, tax or legal advice. Speak to a qualified professional about your circumstances.