The end of energy rebates was always going to reignite cost‑of‑living pressures in 2026 (household budgets strain), and with a possible February rate hike looming, households now face a financial squeeze from both directions.
A 0.25 percentage point rise would add about $110 a month to the average mortgage, while the end of energy subsidies could push power bills up by as much as 20 per cent. This double hit comes as the property market is expected to cool, weakening the wealth effect that’s supported homeowners.
Lower‑income households will feel the energy shock most, as electricity takes up a larger share of their budgets.
Economists had expected the RBA to hold rates in February, but a surprise drop in unemployment has shifted expectations. Major banks including CBA, UBS and HSBC now anticipate a rate rise. With Wednesday’s inflation data likely to be decisive. A hike would benefit savers but frustrate mortgage holders who saw only three cuts before the cycle turned. The pressure will be compounded by the expiry of the $6.8 billion in electricity rebates that ended in December.
Higher power prices will feed into inflation and could slow the strong consumer spending seen over the past year. The government is under pressure to soften the blow as higher bills begin landing. Energy Minister Chris Bowen has given retailers five months to design the Solar Sharer scheme, offering customers three free hours of electricity, though energy companies warn it’s complex and could raise prices.
Even if the scheme launches mid‑year, households still face a tough stretch of rising costs. For mortgage holders, the combination of higher rates and higher power bills could be a painful double hit.
Why Choose UNIfied?
At UNIfied Energy, we’re committed to making your electrification journey seamless. We help Australian households and businesses:
- Reduce energy bills
- Lower carbon emissions
- Confidently invest in clean energy living
Contact UNIfied Energy today or call 1300 817 847 to achieve greater savings in these precarious times and start your journey of clean energy living.
