Key Takeaways
- On 29 September 2026 the RBA lifted the cash rate by 0.25 percentage points to 4.60% — the fourth increase of 2026 and, according to market commentary, the highest cash rate since October 2011. The decision was unanimous.
- If your lender passes the rise on in full, a $600,000 variable loan over 30 years costs roughly $97 more a month — and borrowers who have absorbed all four 2026 rises are paying several hundred dollars a month more than they were in January.
- The RBA’s statement was blunt: inflation outcomes have been “stronger than expected” and the Board will keep “increasing the cash rate target further if needed”. At the time of writing, market pricing suggests another rise before year end is a live possibility.
- This isn’t just a mortgage story. Variable business loans, overdrafts and working capital facilities reprice too — and if you’re planning an equipment purchase, the rate you lock at settlement is the rate you keep for the term.
- The gap between what existing customers pay and what lenders offer new customers tends to widen in a rising market. A repricing call or a refinance review is the fastest lever most borrowers have.
- This is general information only, not personal credit or financial advice. Rates and repayment figures below are illustrative — confirm current pricing with your lender or broker, and RBA figures at rba.gov.au.
The Reserve Bank did yesterday what it had been warning it might do all quarter: it raised the cash rate again. The 0.25 percentage point move takes the cash rate target to 4.60% — the fourth RBA rate rise of 2026, and the one that will have felt most personal, because it landed after months of commentary suggesting the tightening cycle might be close to done. When we previewed this decision in mid-September, the question was whether the Board would move at all. It did, unanimously.
So this morning the questions hitting our inbox from Geelong to Perth are practical ones: how much more will I pay, will there be another rise, should I fix, and — from the business owners we work with — what does this do to my overdraft and the equipment I was about to finance? This guide answers each of those with the facts as they stand today, and a clear set of next moves for both home and business borrowers.
What the RBA Decided — and Why It Kept Going
The Board’s statement is worth reading in its own right, because it explains why a slowing economy is still getting rate rises. In short: inflation is proving stickier than the RBA hoped. The statement notes that “recent inflation outcomes in Australia were stronger than expected”, and points to a combination of pressures — higher global energy prices flowing from the broadened conflict in the Middle East, AI-related demand pushing up technology goods prices, and domestic firms still finding room to raise prices.
Notably for anyone hoping this is the last move, the Board repeated that it will “continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed.” That is not the language of a central bank declaring victory. At the time of writing, market commentary had another rise before the end of 2026 as more likely than not, with ANZ reported to be pricing a further hike as soon as November — forecasts, not facts, and they change quickly, but a sensible borrower plans for the possibility rather than the hope.
The cash rate has now risen four times in 2026 and sits at its highest level in roughly 15 years. An entire cohort of borrowers — anyone who took out their first loan after 2011 — has never held a mortgage or a business facility in an environment like this one. The playbook below is written for exactly that borrower.
How Much More Will Your Repayments Be?
Most lenders pass RBA increases through to variable rates within days to weeks — watch for your lender’s notice, because the effective date and the way it changes your repayment (immediately, or at your next repayment cycle) vary. The table below shows the approximate impact of this single 0.25 percentage point rise on principal-and-interest repayments over a 30-year term, using an illustrative variable rate moving from 6.10% to 6.35%. Your actual rate, term and loan size will produce different numbers — treat this as a guide to scale, not a quote.
| Loan balance | Approx. monthly repayment before | Approx. after this rise | Extra per month |
|---|---|---|---|
| $400,000 | $2,424 | $2,489 | ≈ $65 |
| $500,000 | $3,030 | $3,111 | ≈ $81 |
| $600,000 | $3,636 | $3,733 | ≈ $97 |
| $750,000 | $4,545 | $4,667 | ≈ $122 |
| $1,000,000 | $6,060 | $6,222 | ≈ $162 |
The cumulative picture matters more than any single move. Media analysis of the four 2026 rises put the combined increase at several hundred dollars a month on a typical loan — ABC News, for example, estimated around $364 a month extra on a $600,000 loan across the year’s four hikes, with more again if a fifth arrives. Rate rises also cut what new borrowers can borrow: the same ABC analysis estimated this hike alone trims roughly $47,000 from the borrowing capacity of a single applicant on the average full-time wage. If you hold a pre-approval from before the decision, ask your broker to re-check the numbers before you bid — approvals issued under old assessment rates may no longer reflect what you can actually settle.
Five Moves for Home Borrowers This Week
1. Make the repricing call before you do anything else. Lenders reserve their sharpest variable rates for new customers, and the gap between “front book” and “back book” pricing tends to widen in a rising market. A single call to your lender’s retention team — or a broker doing it for you — asking them to match their new-customer rate is the highest-return fifteen minutes in personal finance. If they won’t move, that’s useful information too.
2. Get a refinance comparison run on today’s numbers. After four rises, the spread between the most and least competitive lenders on your file is likely wider than when you last looked. A refinance assessment costs nothing and tells you exactly what switching is worth; our refinancing guide covers the process and the traps.
3. Decide deliberately on fixed versus variable — don’t drift. Fixed rates already have the market’s expectations of future rises priced into them, so fixing now is not a free escape hatch; it’s a decision about certainty versus flexibility. Our fixed vs variable guide walks through when each genuinely suits, and a split loan remains the each-way option. If a fixed term you took in better times is ending in the months ahead, start planning that rollover now, not the week it expires.
4. Put your offset and redraw to work. Every dollar sitting in an offset account is now saving you interest at your new, higher rate — the return on parking spare cash against the loan just went up again, tax-free. Check that your salary lands in the offset and that surplus savings aren’t idling in a low-interest account elsewhere.
5. If the budget genuinely won’t stretch, act early rather than late. Lenders have hardship teams and real options — repayment pauses, interest-only periods, term extensions — but every option works better before you miss a payment than after. Our mortgage stress guide covers the warning signs and the order in which to pull the levers.
What the Rate Rise Means for Business Borrowers
Most of yesterday’s coverage stops at the mortgage. But the RBA’s own statement flagged strong business investment and business debt growth — and every variable-rate business facility in the country reprices off the same cash rate your home loan does. Three areas deserve attention this week.
Overdrafts and working capital. Variable business overdrafts and lines of credit typically carry higher margins than home loans, so the same 0.25 percentage point move costs proportionally more — and it lands just as the December quarter begins, when retailers and hospitality operators are funding Christmas stock and every employer is running payday super through weekly cash flow. If your facility was priced a year or two ago, a review of your working capital structure is timely; the wrong facility type at the new rates compounds quickly.
Equipment and vehicle finance. Most equipment finance is written at a fixed rate for the term — which cuts both ways. Deals already settled are untouched by yesterday’s rise. Deals still on the to-do list will price off the new environment, and if further rises arrive, off something higher again. If a machine, truck or fit-out purchase is genuinely planned and stacks up commercially, the pricing case for settling sooner rather than drifting is stronger after every hike — though a purchase that only works at yesterday’s rates didn’t really work at all.
Commercial property. Higher rates pressure serviceability on commercial property loans at exactly the moment they also pressure vendor pricing. For well-capitalised owner-occupiers who have been waiting to buy their premises, that combination can create opportunities — but the servicing maths needs to be run at today’s rates plus a buffer, not at the rate on the lender’s website in July. The same discipline applies to any business loan you’re contemplating: build the next rise into the plan, and treat it as a bonus if it never comes.
Client Example
Picture a couple in Armstrong Creek, south of Geelong — one a nurse, the other running a small landscaping business — with a variable home loan in the mid-$600,000s taken out in 2024, plus a ute on finance and a modest business overdraft. They’ve absorbed all four 2026 rate rises without ever renegotiating anything: the home loan has drifted several hundred dollars a month above its January repayment, and the overdraft rate has climbed with each move. The broker’s review after this week’s rise: reprice or refinance the home loan against current new-customer offers, check whether the offset is actually being used, leave the ute loan alone (it’s fixed — the rises never touched it), and restructure the overdraft before the summer cash flow squeeze. The scenario is illustrative rather than a real client file and deliberately contains no lender names or rate quotes — but the pattern is the one we’re seeing everywhere: the borrowers hurting most from 2026’s rises are usually the ones who haven’t asked a single question of their lender all year.
Pro Tip
When your lender’s rate-rise notice arrives in the next fortnight, don’t just file it. Ring the number on it (or have your broker do it) and ask two specific questions: “What rate are you currently offering new customers on my loan type and LVR?” and “What can you do on my rate to keep my business?” Retention teams have discretion that branch staff and websites don’t show, and the difference between the asked-for rate and the default rate — often meaningful after four rises in a year — compounds every month for the rest of your loan.
Frequently Asked Questions
How much will my mortgage repayments go up after the September 2026 rate rise?
If your lender passes on the full 0.25 percentage points, expect roughly $65 a month more per $400,000 of loan on a 30-year principal-and-interest term — about $97 on $600,000 and $162 on $1 million. Your exact increase depends on your rate, balance and remaining term, and on when your lender’s change takes effect. Fixed-rate loans don’t change until the fixed term ends.
Will the RBA raise interest rates again in 2026?
Nobody knows, including the RBA. What we do know is that the Board explicitly kept the door open — its statement committed to “increasing the cash rate target further if needed” — and at the time of writing market commentary put another rise before year end as a live possibility, with at least one major bank reported to be forecasting a November move. The prudent approach is to stress-test your budget against one more rise and treat a pause as the upside case.
Should I fix my home loan rate now that rates are rising?
Fixing is a decision about certainty, not a bet you can reliably win — lenders set fixed rates with future rises already priced in, and several have been raising fixed pricing as expectations shifted. Fixing suits borrowers who value a known repayment and would genuinely struggle if rates rose further; staying variable (or splitting the loan) suits those who want offset flexibility and the ability to make extra repayments. The right answer depends on your buffer, your plans and your risk tolerance — it’s exactly the conversation to have with a broker rather than a hunch to act on.
What does the cash rate rise mean for business loans and equipment finance?
Variable-rate business facilities — overdrafts, lines of credit, many term loans and most commercial property loans — will reprice upward, just as home loans do. Equipment and vehicle finance is usually fixed for the term, so existing agreements don’t change, but new deals will be written at the higher prevailing rates. If your facilities haven’t been reviewed in over a year, a rising-rate environment is precisely when the gap between a well-structured and poorly-structured lending setup shows up in your cash flow.
Four Rate Rises In — When Did You Last Review Your Loans?
Whether it’s repricing your home loan, running a refinance comparison, or restructuring business facilities before another possible rise, we’ll do the numbers on your actual loans — not the averages. Based near Geelong, working with home and business borrowers Australia-wide by phone and video. No obligation.
Melanie McNaughton
Director & Senior Finance BrokerWith years of experience in mortgage broking and finance, Melanie helps first home buyers, refinancers, investors and business owners across Geelong, the Bellarine, the Surf Coast, Melbourne and regional Victoria make their money work harder. Contact our team on 03 9020 2699.