Inflation’s rising, rates are paused — here’s what to do next
The economy feels a bit like it’s driving with one foot on the accelerator and the other on the brake.
Inflation is rising again.
Interest rates are still on hold.
Unemployment is climbing.
And house prices? They’ve just recorded their fastest monthly rise in two years.
It’s a tricky mix and it’s leaving a lot of people wondering, “What now?”
Recent data tells the story:
National house prices rose 0.8% in October, the fastest monthly increase since 2022 (Bloomberg, Nov 2025)
Unemployment has hit 4.5%, the highest level since October 2021 (Trading Economics, 2025)
Savings rates have dropped to 4.2%, in the second quarter of 2025 from 5.20 percent in the first quarter of 2025. (Trading Economics, 2025)
It paints a clear picture: the cost of living is up, buffers are down and the job market’s softening.
And then there’s the elephant in the room the 5% deposit scheme for first home buyers.
On the surface, it’s a great initiative helping people get into the market sooner by only needing a 5% deposit (with the government guaranteeing the rest).
But here’s the catch: a small deposit means a big loan and very little room for error.
If rates rise or prices dip, buyers risk owing more than their property is worth, something we’ve seen many times before.
And while the scheme removes the need for lenders mortgage insurance, it doesn’t protect against repayment stress if income drops or interest costs increase.
It’s a reminder that the scheme can be helpful but only with a clear plan to build equity, manage risk and keep breathing room in your budget.
So what should you do in a market like this?
Stress test your numbers.
Ask yourself: if rates rose 1-2% next year, would your plan still hold up? If not, tweak it now not later.
Protect your buffer.
Aim to keep 3–6 months’ worth of expenses as a safety net. Savings might not sound exciting, but they buy peace of mind when the world gets jumpy.
Focus on what you can control.
You can’t predict the RBA’s next move but you can control your cash flow, your debt strategy and your investing habits.
Check your savings rate.
The national average is 4.2% — what’s yours? 0%, 10%, 20%? The higher your number, the more options and breathing room you have when things change.
There’s a quote that always rings true in uncertain times:
“It’s not the strongest who survive, nor the most intelligent but those most adaptable to change.”
No one knows exactly what’s around the corner but the people who plan, review and adapt are always the ones who come out stronger.
If you’re feeling uncertain about how these changes affect your plan or if your savings buffer or debt structure needs a check-in — contact us with “Check In” and we’ll help you review your position and options.
Because in markets like this, waiting and worrying achieves nothing.
Reviewing and adjusting?
That’s how you find calm in the chaos.
Talk soon,
7Wealth Pty Ltd ABN 44609210246 is a Corporate Authorised Representatives and is authorised throughCobalt AdvisersPty Ltd ABN 64 628 654 099 who is an Australian Financial Services Licensee 512550. 7Wealth Pty Ltd is a Credit Representative ofAustralian Finance GroupLtd ABN 11 066 385 822 (AFG) Australian Credit Licence 389087.
This blog contains information that is general in nature. It does not constitute financial or taxation advice. The information does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Cobalt Advisers Pty Ltd nor their directors, employees or authorised representatives, do not give any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document.
