The Reserve Bank of Australia raised the cash rate by 0.25 of a percentage point to 4.60 per cent on 29 September 2026, and all four major banks are passing the increase on in full to variable home loan customers from Thursday 9 October. For a typical variable borrower, that means repayments go up again this month, for the fourth time this year.
The decision was widely expected. Fixed rates had already jumped in the week before the meeting, as we covered in our look at banks moving fixed rates ahead of the RBA. What matters now is what it costs, and whether another rise is coming before Christmas.
What the RBA decided and why
The Monetary Policy Board’s decision was unanimous. It takes the cash rate from 4.35 per cent to 4.60 per cent, the highest level since late 2011, and follows earlier increases in February, March and May. In total the cash rate is now a full percentage point higher than it was at the start of 2026.
In its statement, the Board said inflation “remains elevated” and that some of the upside risks it flagged in August “are materialising”. It pointed to three pressures:
- Energy prices. The Board said the conflict in the Middle East has broadened and global energy prices are now much higher than assumed in its August forecasts.
- Technology goods. It noted that AI-related demand is driving rapid growth in global prices for technology-related goods.
- Domestic capacity. It said there is still pressure on domestic capacity, with firms facing cost pressures.
The Board also acknowledged that consumer spending is easing, housing prices have fallen in most capitals and new housing loans have dropped noticeably. Its view is that demand needs to “remain subdued for a period” to bring inflation back to the 2 to 3 per cent target, and it kept the door open to further increases “if needed”.
What it means for your repayments
Commonwealth Bank, NAB, Westpac and ANZ have all announced 0.25 point increases to their variable home loan rates, effective 9 October 2026, according to the ABC. Macquarie Bank is lifting variable home loan and deposit rates by the same amount from 15 October. Other lenders typically announce their own changes in the days after a decision, so check your lender’s notice if you are with a smaller bank or credit union.
As a rough guide, Blogbox estimates that a 0.25 point rise on a variable rate of around 6.3 per cent adds about $82 a month to repayments on a $500,000, 30-year principal and interest loan, about $98 a month on a $600,000 loan and about $123 a month on a $750,000 loan. These are illustrative estimates only, assuming the rise is passed on in full and the loan has its full term left. Your own figure depends on your rate, balance and remaining term.
Across all four hikes this year, the cumulative cost is much larger. On the same assumptions, a one percentage point rise adds roughly $387 a month to a $600,000, 30-year loan, or more than $4,600 a year.
How stretched are borrowers?
The RBA’s Financial Stability Review, released on 1 October, offered some reassurance. It estimated that fewer than 2 per cent of variable rate owner-occupier borrowers had a cash flow shortfall as at the end of June, meaning their income did not cover essential spending and loan repayments. It expects that share to edge up to around 2 per cent or slightly above as higher rates bite.
The review also found the median borrower holds offset and redraw buffers worth more than a year of scheduled repayments, and that fewer than 1 per cent of mortgages are in negative equity. If you are struggling, though, contact your lender early. Banks are required to consider hardship requests, and options can include a temporary repayment reduction or a change to your loan terms.
Do not wait for the new repayment to hit your account. Rework your budget the week the rate rise is announced, not the month it lands.
Is a November hike coming?
That is now less certain. The RBA next meets on 3 November 2026. On 30 September, the ABS monthly CPI indicator showed annual headline inflation rising to 4 per cent in August, up from 3.5 per cent in July, driven by housing costs and fuel. That was slightly below the 4.1 per cent economists had forecast, and the trimmed mean measure the RBA watches most closely held at 3.6 per cent for a third straight month.
The ABC reported that the odds of a November rise fell sharply after the release, and Savings.com.au reported ANZ as the only major bank still forecasting another hike in November. The full September quarter CPI, due in late October, is likely to be the key input.
What borrowers and savers can do now
This is general information only, not personal financial advice. A few practical steps are worth considering:
- Check your new repayment. Your lender should notify you of the change. If you pay a fixed dollar amount above the minimum, confirm it still covers the new required repayment.
- Ask for a better rate. With new lending slowing, lenders are competing for existing customers with good repayment histories. A short call asking for a rate review costs nothing.
- Compare the market. The gap between the cheapest and most expensive variable rates can be wide. It is worth taking time to compare variable home loan rates across lenders before assuming your current deal is competitive. Our guide to refinancing a home loan walks through the costs and the process.
- Savers, watch your rate. Some banks lift deposit rates after a hike, but not always by the full amount or straight away. Check whether your savings account or term deposit has moved.
The bottom line
The RBA’s fourth rate rise of 2026 takes the cash rate to 4.60 per cent, and variable borrowers with the big four will pay more from 9 October, roughly $98 a month extra on a $600,000 loan by Blogbox’s estimate. Softer than expected August inflation has cooled talk of a November move, but the Board has made clear it will raise rates again if inflation does not ease. Check your lender’s notice, review your budget now, and confirm the official decision and statement with the Reserve Bank of Australia. All figures were reported between 29 September and 5 October 2026 and may change.