The Reserve Bank lifted the cash rate again in early November, to 4.85 per cent, and the first reaction for most families thinking about trading up is to hit pause. Borrowing more just got dearer. Surely it makes sense to wait?
For buyers who are selling one home to buy a bigger one, the maths often says otherwise. What a rate rise costs you is real. But for an upsizer, it is usually smaller than what has come off the price of the home you are buying.
What a rate rise actually costs
A 0.25 per cent rise on a $1.5 million loan adds about $3,750 a year in interest. On $3 million it is about $7,500. That is real money, and it adds up across a cycle that has already seen the cash rate lifted five times this year, to 4.85 per cent.
Now look at the price side. Brisbane values fell two per cent in October alone and are now 8.3 per cent below their May peak, according to Cotality. In practice, I think some types of property are off by more than that. The biggest gains for buyers are above $2.5 million, where most vendors are upsizing too.
One home, two moments
Take a family home that would have cost $4 million in May. Today, a home like it might sell for $3.5 million. Here is what changes for a buyer putting down a 20 per cent deposit, with the mortgage rate up half a per cent in between.
| May: $4.0M at 6.25% | Now: $3.5M at 6.75% |
|---|
| Deposit (20%) | $800,000 | $700,000 |
| Stamp duty | $203,350 | $174,600 |
| Cash needed to settle | $1,003,350 | $874,600 |
| Loan | $3,200,000 | $2,800,000 |
| Repayment per month | $19,703 | $18,161 |
Illustrative only. 30-year principal and interest, QLD transfer duty at the home concession rate, mortgage rates assumed at the cash rate plus 1.90%. The Now column uses the cash rate after the 3 November rise (4.85%).
Even at the higher rate, the repayment is about $1,540 a month lower, because the loan is $400,000 smaller. The buyer also needs almost $130,000 less cash on the day, between a smaller deposit and less stamp duty.
The repayment on the smaller loan only catches up with May's if mortgage rates climb to around 7.6 per cent. That would take roughly three more rises from here.
The catch: you are selling too
Most upsizers are not buying with cash in the bank. They are selling a home to fund the next one, and that home has probably come off as well. What matters is the gap between what you sell for and what you buy for.
One of our clients is a good example. We helped them secure their home in Norman Park in 2020 for $915,000. They sold it at auction in early November for $1,510,000. Earlier this year it would have fetched about $1.65 million, so they took around $140,000 less than they would have in May.
At the end of September we secured their next home for $3,510,000. Earlier this year it would have been $4 million or more, and the vendor had wanted $4.2 million. The gap between what they sold for and what they bought for narrowed from about $2.35 million to $2 million, a $350,000 swing in their favour, and the stamp duty came in about $28,000 lower.
Say they owed $600,000 on the old home, paid the stamp duty out of the sale proceeds, and had put away another $30,000 since May. The loan on the new one is about $410,000 smaller than it would have been in May, and even with the mortgage rate half a per cent higher, the repayment is about $1,620 a month less. The fall on their sale was real. The fall on their purchase was three and a half times bigger.
The dollars fall harder at the top. A five per cent drop on a $2 million home is $100,000. On a $4 million home it is $200,000. When you sell the smaller one and buy the bigger one, the gap usually narrows.
It only works if your expectations on both sides are honest. I meet sellers who want top dollar for their own home and a deep discount on the next one. Plan to sell for $5 million and buy for $3 million, end up paying $3.5 million and selling for $4.2 million, and was the whole exercise really worth it? That is why I often suggest taking your home to market first, so you know the real number before you commit to the next one.
Run your own move
Put in your own numbers below. It starts with the Norman Park move above. Use what your home would realistically sell for today and what it might have fetched at the peak, and the same for the home you want to buy.
Repayment today
Loan today
Price gap
Illustrative only, not financial advice. Stamp duty is QLD transfer duty at the home concession rate for an Australian citizen or permanent resident buying a home to live in, and is paid from your cash rather than borrowed. Repayments are 30-year principal and interest. The default rate today follows the 3 November rise. Your lender's figures will differ.
Why waiting rarely pays
Rates also take a second bite. Our rough rule is that each 0.25 per cent rise takes a little over two per cent off what a buyer can borrow. Waiting for prices to fall further can leave you able to borrow less by the time they do.
Nobody ever knows where the bottom is. If you can afford the property now, and you can afford another rate rise, and we can get good value now, why wait? That is my question.
Rates move up and down over a cycle, and a loan can be refinanced down the track. The price you pay is locked in the day you sign.
For more on why the top end is where the value sits, read Why the Best Buys in Brisbane Right Now Are Above $2.5 Million.
Thinking about trading up? My team and I can run these numbers with you on your own move. Book a call at huntergather.com.au/contact-us.
This article is general information only and isn't financial, legal or tax advice. Market figures as at 4 November 2026. Sources: Reserve Bank of Australia, cash rate target (4.10% to 5 May, 4.35% from 6 May, 4.60% from 30 September, 4.85% from 4 November 2026). Cotality Home Value Index, November 2026 (Brisbane down 2.0% in October, 8.3% below the May 2026 peak). Queensland Revenue Office, transfer duty home concession rates.
