At Lending Association, strong outcomes start with strong thinking.
Meet Shadab Naseem, one of the sharpest analytical minds inside Lending Association.
In a market where most people are reacting to headlines, Shadab is doing something different, he is stepping back and analysing what the data is really telling us.
As a Commercial Analyst based in the LA ACT office, Shadab brings a rare combination of technical expertise and real-world credit insight. His strength lies in cutting through noise and focusing on what actually drives long-term outcomes for clients.
His latest piece explores Australia’s interest rate cycle, from the historic lows of 2020 through to today’s elevated environment. More importantly, what it reveals about risk, resilience, and decision-making in lending.
Because the real story isn’t just about rising repayments.
It’s about:
- How loans were structured in the first place
- The assumptions made when rates were low
- And whether those decisions can withstand a changing market
As Shadab puts it:
“Good lending isn’t about predicting the next move, it’s about structuring for what happens if you are wrong.”
This is exactly the kind of thinking that sets Lending Association apart. Disciplined, forward-looking and built for long-term performance.
If you are having conversations with clients right now around affordability, buffers or risk… this is a perspective worth reading.
Rising interest rates test more than affordability, they test judgement.
Australia’s interest‑rate journey over the past five years is a case study in credit discipline, risk management, and resilience.
After sitting at 0.10% in November 2020, the RBA delivered emergency stimulus to stabilise the economy.
From May 2022, policy shifted sharply. Inflation forced one of the fastest tightening cycles in decades, taking the cash rate to 4.35% by late 2023.
A period of temporary easing through 2025 gave households some breathing room — but it didn’t last.
By March 2026, rates were lifted again to 4.10%, where they remain in April, as inflation proves stickier than expected and financial conditions tighten once more.
Now attention turns to the next RBA review on 5 May.
Whether the Bank holds or moves again, the message is already clear: policy is less forgiving, and the era of easy assumptions is firmly behind us.
The takeaway?
- Cheap money was never permanent
- Resilience is built before conditions tighten, not after
- In higher‑rate environments, structure, buffers, and judgement matter more than price
Those who planned for rate normalisation are navigating this cycle very differently from those who assumed ultra‑low rates were the new normal.
| Period | RBA Cash Rate (%) | Context |
| Nov 2020 | 0.10% | Emergency pandemic stimulus |
| May 2022 | 0.35% | Start of tightening cycle |
| Dec 2022 | 3.10% | Rapid inflation response |
| Nov 2023 | 4.35% | Peak of first tightening phase |
| Aug 2025 | 3.60% | Temporary easing |
| Mar 2026 | 4.10% | Rates move higher again |
| Apr 2026 | 4.10% | Policy hold; assessment phase |
Source: Reserve Bank of Australia [rba.gov.au]
What this rate environment is revealing goes well beyond repayments.
Research shows that around one‑quarter of Australian mortgage holders are currently considered “at risk” of mortgage stress. Importantly, this stress is not solely driven by higher interest rates, but by a combination of larger loan sizes, limited buffers, and optimistic assumptions made earlier in the credit cycle.
Further analysis suggests the situation may intensify. Mortgage stress is expected to reach new highs in 2026 if interest rates remain elevated or move higher again, with modelling indicating a growing number of households becoming financially stretched as rate buffers are tested.
This is where experience and discipline matter most. At Lending Association, we have seen multiple cycles play out and our focus remains consistent; structuring lending solutions that can withstand change, not just optimise for the moment.
This environment reinforces an important lesson:
Good lending is not about predicting where rates go next, it’s about how loans were structured to perform when conditions change.
Sustainable outcomes depend on realistic assumptions, disciplined credit assessment and long‑term risk thinking; not just headline pricing at the point of approval.
Curious to hear how others are approaching client conversations as this phase of the cycle continues.
From a credit perspective, this environment highlights three enduring truths:
• Interest rates are cyclical, but leverage decisions are permanent
• Buffers matter more than forecasts
• Loan structure is as important as loan pricing
Good lending isn’t about predicting the next RBA move. It’s about applying robust judgement at origination, stress‑testing assumptions, understanding income resilience and structuring facilities that remain sustainable across cycles.
At Lending Association, this philosophy underpins every client conversation. We take a long-term view to balance risk, ensuring clients are not just positioned for today’s conditions, but for the full cycle ahead. With over 15 years of experience across multiple interest rate environments, we focus on helping clients borrow what they should, not simply what they could.
As the market recalibrates, long‑term outcomes will increasingly depend on disciplined credit assessment and risk‑aware decision‑making. Not just the headline rate on offer.
If you are thinking about your next move, the right question isn’t just what rate can I get, it’s how well is this structured for the future.
Start a conversation with the team at Lending Association and ensure your lending strategy is built to perform across the full cycle.
Book a time that suits you HERE or call the team directly HERE
Written By: Shadab Naseem, Senior Analyst, Lending Association
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