The Reserve Bank of Australia has left the cash rate on hold at 4.35% at its 11 August 2026 meeting — but the message to commercial borrowers is clear: this is a pause, not a turning point. The Board made a point of stating it will increase the cash rate further if upside inflation risks materialise.
For anyone financing commercial property or running a business with debt, understanding what sits behind today’s decision matters as much as the decision itself.
What the RBA Actually Said
The Board’s decision to hold was unanimous. But the tone of the accompanying statement was firmly cautious, and several points stand out for commercial borrowers.
Inflation is still too high. The RBA does not expect inflation to return to around the midpoint of its target range until late 2027, and it flagged clear upside risks to even that projection. The disruption to global oil supply from the Middle East conflict is adding directly to inflation, and higher fuel prices are now being passed through to the prices of other goods and services.
Financial conditions have already tightened. Three rate increases earlier in 2026 have pushed up money market rates and bond yields, and the Australian dollar has appreciated. The RBA describes monetary policy as “somewhat restrictive” — which is the point. The Board wants demand subdued to bring inflation down.
Business investment is strong. Notably for commercial borrowers, the RBA observed that growth in business debt and investment remains strong, even as consumer spending slows. This tells us businesses are still borrowing and investing despite higher rates.
What This Means for Commercial Borrowers
Your Rate Is Stable — For Now
A hold means your variable commercial loan repayments do not change this month. After three hikes in 2026, that stability is welcome. But the RBA has explicitly reserved the right to hike again, so treat this as breathing room rather than the end of the tightening cycle.
Serviceability Buffers Matter More Than Ever
With the Board openly signalling further hikes are possible, lenders will keep stress-testing your borrowing capacity at rates above the current level. If you are applying for commercial finance now, expect to be assessed at 4.85% or higher. Build that into your planning.
Business Investment Is Holding Up — and Lenders Know It
The RBA’s own statement confirms business debt and investment growth is strong. That is a signal of confidence in the commercial sector. Lenders remain active and competitive for quality commercial assets and well-structured business finance, even in this higher-rate environment.
Commercial Property Valuations Face Continued Pressure
A “higher for longer” rate environment keeps upward pressure on capitalisation rates, which weighs on commercial property values — particularly secondary-grade assets and those with shorter leases. Prime, well-leased assets with strong tenants continue to hold their value best.
What to Do Now
Stress-test your debt at 4.60% and 4.85%. The RBA has told you further hikes are on the table. Know your numbers before it moves.
Review your loan structure. With rates holding, this is a sensible window to check whether your current facility is still competitive. A margin reduction on a large commercial loan can save thousands per year.
Consider fixing part of your loan. If certainty matters to your cash flow and you are concerned about another hike, a split or fixed structure may be worth modelling with your broker.
Get finance in order before you buy. If you are planning a commercial purchase, arrange pre-approval now. It locks in current assessment criteria before any future hike tightens serviceability further.
Speak to a Commercial Finance Specialist
Today’s hold gives commercial borrowers a moment to get their finance in order — but the RBA has made clear the tightening cycle may not be over. Being prepared for the next move is far more valuable than reacting to it.
Our team works with commercial property investors, business owners and developers to structure finance that holds up across different rate scenarios. If you want to understand what today’s decision means for your loan, get in touch.
Book a free commercial finance consultation today.
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This article is general information only and does not constitute financial advice. Based on the RBA cash rate statement of 11 August 2026. Rate decisions and economic conditions are subject to change. Please speak with a licensed commercial finance broker for advice specific to your situation.