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The Reserve Bank of Australia (RBA) has increased the cash rate target by 25 basis points to 4.60 per cent. It is the fourth hike this year and the highest level in about 15 years. If you have a home loan, here is what the decision means for your repayments and what you can do about it. rbaabc
Why did the RBA raise the cash rate?
The RBA said inflation remains elevated and that some of the upside risks it flagged in August are materialising. It also pointed to the conflict in the Middle East, which has pushed global energy prices well above what it had assumed. For the first time in a rate decision, it named AI-related demand as a driver of technology goods prices. RBA Announcement +2
The decision was unanimous, and the Board said it may raise the cash rate further if needed. rba
How much will my mortgage repayments increase?
The exact amount depends on your loan size, remaining term and lender. As a guide, one broker estimates that each 0.25 percentage point rise adds about $161 a month to repayments on a $1 million mortgage. By simple scaling, a $500,000 loan would rise by roughly $80 a month. lawyersweekly
These are estimates only. Your lender will confirm your actual figures.
Will my lender pass on the increase?
Variable-rate borrowers should expect it to flow through. Macquarie, for example, is raising its variable home loan reference rates by 0.25% per annum, effective 15 October 2026. Variable-rate customers will be notified of their new rate and repayment on or after that date. macquariemacquarie
Timing varies by lender, so check your bank’s announcement. Fixed-rate borrowers are not affected until their fixed term ends.
Steps you can take now
1. Check your current rate.
Compare it against what other lenders offer. After several rises in a year, your rate may no longer be competitive, and a review is worthwhile if you haven’t done one recently. Ask your lender for a better rate before deciding to refinance.
2. Consider an offset account.
An offset account linked to a variable loan means every dollar in it can reduce the interest you pay on the loan. Some lenders offer several offset accounts per loan, so check what yours allows. macquarie
3. Look at splitting your loan.
Some lenders let you split a loan into fixed and variable portions, giving you some certainty while keeping flexibility. Compare the fees and terms first. macquarie
4. Build a buffer.
If you can, keep making your current repayment or a little more once the increase applies. That leaves you room if rates rise again.
5. Get help early if you’re struggling.
Lenders may offer financial assistance if you have trouble paying or your circumstances have changed. Contact your lender before you miss a payment, as options are wider the earlier you ask. macquarie
Read More Blog : Mortgage Rates Hit New 2026 High, Inching Toward 7% — What Buyers Should Know
Will the RBA raise rates again?
The next RBA decision is due on 3 November 2026. Future moves will depend on inflation data and the economic outlook, so it is worth reviewing your budget and loan structure now rather than waiting. karmactive
The bottom line
A 0.25 percentage point rise is not dramatic on its own, but it adds up after four hikes in one year. Check your rate, understand your repayments and talk to your lender or a mortgage broker about your options.
This article is general information only and is not financial advice. It does not take into account your objectives, financial situation or needs. Consider speaking with a licensed financial adviser or mortgage broker before making decisions.
FAQs
1. What is the RBA cash rate now?
The RBA raised the cash rate target by 25 basis points to 4.60 per cent on 29 September 2026. The new rate took effect on 30 September 2026 and is the highest since around 2011. rbakarmactive
2. How much will my repayments go up?
It depends on your loan size, remaining term and lender. One broker estimates that each 0.25 percentage point increase adds about $161 a month to repayments on a $1 million mortgage. That works out to roughly $80 a month on a $500,000 loan. Your lender will confirm your exact new repayment. lawyersweekly
3. When will my lender’s rate increase take effect?
It varies by lender. Macquarie, for example, is increasing its variable home loan reference rates by 0.25% per annum, effective 15 October 2026, and variable-rate customers are notified of their new rate and repayment on or after that date. Fixed-rate loans are not affected until the fixed term ends. Check your own lender’s announcement for its date.
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