RBA Rate Rise: How Much Will Your Home Loan Repayments Go Up?
The Reserve Bank meets on 28 and 29 September, and all four big banks now expect the cash rate to rise from 4.35% to 4.60%. Financial markets have priced in roughly a 90% chance of a hike, up from about 30% before the July inflation figures landed.
How much will a rate rise add to your home loan repayments?
Why the RBA is expected to lift rates
Inflation is still sitting above the RBA's 2 to 3% target band. The Consumer Price Index rose 3.5% over the year to July, and trimmed mean inflation, the measure the RBA watches most closely, held at 3.6%.
On top of that, oil prices have jumped. Brent crude has climbed from around US$80 a barrel to above US$100 because of the conflict in the Middle East. That tends to flow through to petrol, diesel and freight costs, and eventually to the price of almost everything else.
The RBA Governor has also told a parliamentary committee that some upside risks to inflation appear to be materialising. When the central bank starts talking like that, the market listens.
What a 0.25% rise means for your repayments
Here's a simple guide. These figures assume a principal and interest loan with 30 years remaining, moving from a variable rate of 6.10% to 6.35%. Your own numbers will depend on your rate and loan term, but this gives you a realistic ballpark.
$500,000 loan: repayments rise from about $3,030 to $3,111 a month, roughly $81 more
$750,000 loan: repayments rise from about $4,545 to $4,667 a month, roughly $122 more
$1,000,000 loan: repayments rise from about $6,060 to $6,222 a month, roughly $162 more
ANZ is tipping a second hike in November, which would take the cash rate to 4.85%. If that happens, double the numbers above. On a $750,000 loan, that's around $245 a month, or close to $3,000 a year.
When will your lender pass it on?
If you're on a variable rate, your lender will usually announce its own increase within a day or two of the RBA decision. The new rate typically kicks in a week or two later.
Your repayment amount doesn't always change straight away, though. Some lenders adjust your repayment on the next scheduled date. Others wait until your next annual review. If your repayment stays the same while your rate goes up, more of each payment goes to interest and less comes off the loan. Check your lender's letter or app so you know which camp you're in.
If you're on a fixed rate, nothing changes until your fixed term ends. The catch is that fixed rates have already been creeping up, as lenders price in what they expect the RBA to do. If your fixed term ends in the next six to twelve months, the rate you roll onto could be noticeably higher than the one you have now.
Why this one feels harder than the last few
Property values have been falling. National home values dropped 0.9% in August alone and are now 3.6% below their March peak. The share of capital city suburbs recording falls has jumped from under half in autumn to 93% through winter.
That matters for two reasons. First, less equity can make it harder to refinance to a cheaper lender. Second, lower prices don't help existing owners with their repayments. Your loan balance stays the same even when your home's value drops.
If you bought in the last year or two with a small deposit, it's worth getting a clear picture of where you stand now, before any more rises land.
What you can do before the rate rise hits
You have more control than it might feel like right now. Here's where to start.
Ask your lender for a better rate. Lenders often give existing customers a discount if they ask, especially when a competitor is offering less. Our guide on how to negotiate a lower interest rate on your home loan walks you through exactly what to say.
Compare your rate with what new customers get. Many borrowers are paying well above the rate their own lender offers new customers. A broker can check this for you in minutes.
Review your budget now, not later. Add $100 to $250 to your monthly mortgage line and see if it still works. If it doesn't, you have time to adjust.
Build a buffer in your offset or redraw. Every dollar in an offset reduces the interest you pay, and it gives you breathing room if things get tight.
Think about fixing part of your loan. A split loan lets you lock in some certainty while keeping flexibility on the rest. Our guide on whether you should fix your home loan rate in 2026 covers the pros and cons.
Talk to your lender early if you're worried. Lenders have hardship teams, and they would much rather hear from you before you miss a payment than after.
Should you fix before the RBA decision?
Maybe, but don't rush it. Fixed rates already include the market's expectations of rate rises. That means you're not necessarily beating the RBA by fixing today, you're paying for certainty.
Fixing makes the most sense if a steady repayment would help you sleep at night, or your budget can't handle further rises. It makes less sense if you plan to sell, refinance or make big extra repayments in the next few years, because break costs and repayment caps can bite.
CBA economists still expect rate cuts in 2027, starting around August. If that forecast holds, a long fixed term could leave you paying more than variable borrowers later on. A split loan is often a sensible middle ground.
Signs you should get help now
A rate rise is manageable for most households, but some people are closer to the edge than they realise. It's worth talking to someone if:
Your mortgage repayments are already more than 30% of your take-home pay
You're relying on credit cards or buy now pay later to cover everyday bills
Your savings buffer has shrunk over the past few months
Your fixed rate ends in the next year and you haven't planned for the jump
If any of these sound familiar, our guide to mortgage stress in Australia explains the warning signs and practical ways to ease the pressure.
Ready to Get Ahead of the Rate Rise?
You don't need to wait for the RBA announcement to act. A quick review of your loan today could save you hundreds of dollars a month and give you peace of mind whatever the RBA decides.
We'll compare your current rate against the market, check whether a refinance, a rate negotiation or a split loan makes sense for you, and do the legwork with lenders on your behalf. It costs you nothing to have a chat.
A portion of every loan we settle goes to Australian Wildlife Conservancy, helping protect native species like the echidna for generations to come.