Published 27 September 2026. This article was written before the RBA’s 29 September decision. We’ll publish an update once the outcome is known.
The Reserve Bank of Australia (RBA) announces its next cash rate decision on Tuesday 29 September at 2:30pm AEST (2:00pm in Adelaide).
The cash rate is currently 4.35%. It has already risen three times this year, by a total of 0.75%, before the RBA held it steady in August. Market pricing and most economists expect another 0.25% rise this week, although a hold is still possible.
Nobody knows the outcome until Tuesday. What borrowers can do is understand how a rise would flow through to their loan, and check where they stand either way.
What is the cash rate?
The cash rate is the interest rate banks charge each other to borrow money overnight. The RBA sets a target for it, and that target influences the rates lenders charge on home loans, personal loans and business loans.
When the cash rate goes up, lenders’ funding costs usually rise too. Most lenders pass at least some of that increase on to variable rate borrowers, although they aren’t required to, and they can also change rates independently of the RBA.
Why another rise is being discussed
The RBA’s job is to keep inflation within a target range of 2 to 3 per cent. Inflation has stayed above that range through 2026.
In August, the RBA held the cash rate but said it could raise it again if the risks of higher inflation materialised. Since then, inflation figures have remained above target and the job market has stayed tight, which is why many expect a move this week.
What a rise could mean for your repayments
If the RBA lifts the cash rate by 0.25% and your lender passes the full increase on to your variable rate, here is roughly how much more you could pay each month.
| Loan amount | Extra per month for a 0.25% rise | Total extra since early 2026 if rates rise a further 0.25% (1.00% in total) |
|---|---|---|
| $250,000 | about $40 to $42 | about $164 |
| $500,000 | about $81 to $84 | about $329 |
| $750,000 | about $121 to $127 | about $493 |
| $1,000,000 | about $162 to $169 | about $658 |
Assumptions: 30-year principal and interest loan with monthly repayments. The 0.25% column assumes a current interest rate between 6% and 7%. The 1.00% column assumes an interest rate of about 6% at the start of 2026 and that every rise was passed on in full. These are examples only. Your actual figures depend on your loan balance, remaining term, rate and lender.
If you have an interest-only loan, the increase is larger because none of your repayment goes towards the principal. A 0.25% rise works out to about $52 a month for every $250,000 borrowed.
When would the change show up?
Lenders usually announce whether they’ll pass on a cash rate change within a few days, and the new rate often applies a week or two later. Your lender must tell you about a change to your rate and repayments, but the notice may arrive on or around the day the new rate starts, rather than well in advance.
If you’re on a fixed rate
Your rate and repayments stay the same until your fixed term ends. The bigger question is what rate you’ll roll onto. If your fixed rate was set before this year’s rises, the jump when it ends could be noticeable, so it’s worth knowing your expiry date and checking your options a few months beforehand.
If you’re thinking about fixing now, keep in mind that fixed rates often move ahead of the cash rate because lenders price in what they expect to happen. Fixing in a hurry before Tuesday won’t necessarily save you anything, and fixed loans usually come with less flexibility and possible break costs.
What a rise could mean for property prices
The link between the cash rate and property prices isn’t straightforward.
Higher rates reduce how much people can borrow. Lenders assess your application using an interest rate that is higher than the one you’d actually pay, so when rates rise, the assessment rate rises with them and borrowing capacity falls. Fewer buyers with less to spend can slow price growth and lengthen negotiations.
At the same time, housing supply remains tight in many parts of Australia. In past rate cycles, rises have tended to slow price growth rather than cause sharp falls, but that isn’t guaranteed and the effect varies a lot between cities and suburbs.
First home buyers
First home buyers often feel rate rises first because they tend to borrow closer to their maximum. A rise could mean a smaller loan amount than a pre-approval issued a few months ago suggested. If you have a pre-approval, check its expiry date and whether your lender will reassess it at the new rate.
Property investors
For investors, higher rates increase holding costs and reduce the property’s net cash flow. Rental demand remains strong in many areas, which can help offset some of that cost, but it’s worth running the numbers on your current loans rather than assuming rent increases will cover the difference.
What you can check now, whether rates rise or not
None of these steps depend on Tuesday’s outcome. They’re worth doing either way.
Know your current rate and loan details. Check your latest statement for your interest rate, loan balance, remaining term and whether any part of the loan is fixed.
Run your own numbers. You can test what your repayments would look like at a higher rate.
Use your offset account or redraw, if you have one. Money in an offset account reduces the balance you’re charged interest on. Extra repayments you’ve made into a redraw facility also reduce your balance and the interest charged, although redraw rules vary between lenders.
Review your rate. Borrowers who have been with the same lender for several years are sometimes paying more than newer customers. Asking your lender for a rate review costs nothing.
Look at refinancing carefully. Moving to a different lender or loan can lower your repayments, but check the costs first, including discharge fees, application fees and any break costs on a fixed loan. If you’re thinking about rolling other debts into your home loan, remember that spreading short-term debt over a 25 or 30-year term can lower your repayments but increase the total interest you pay.
Build a buffer. Even a small amount set aside now can make a later rise easier to absorb.
If you’re finding repayments hard
Contact your lender as early as you can. You have the right to ask for hardship assistance, and lenders must consider your request. Options can include a temporary change to your repayments or loan term.
The National Debt Helpline (1800 007 007) offers free, confidential financial counselling.
Key points
- The RBA announces its decision on 29 September. A 0.25% rise is widely expected but not certain.
- If a rise is passed on in full, variable repayments on a $500,000 loan could increase by about $80 to $85 a month.
- Fixed rate borrowers aren’t affected until their fixed term ends.
- Higher rates reduce borrowing capacity, which can slow price growth.
- Checking your loan, buffer and options now is worthwhile whatever the RBA decides.
Frequently asked questions(FAQ)
Will the RBA definitely raise the cash rate on 29 September?
No. Market pricing and most economists expect a 0.25% rise, but the RBA can also hold. The decision depends on the Board’s view of inflation, jobs and spending at the time of the meeting.
If the cash rate rises, will my repayments go up straight away?
Not usually on the day. Lenders generally announce within a few days whether they’ll pass on the change, and the new rate often starts a week or two later. Your lender must tell you about the change, but the notice may arrive on or around the day it takes effect.
Do lenders have to pass on the full increase?
No. Lenders set their own rates. Most pass on cash rate changes to variable rate loans, but they can pass on more, less or nothing, and they can change rates at other times too.
I’m on a fixed rate. Does this affect me?
Not until your fixed term ends. At that point your loan usually rolls onto a variable rate, which will reflect any rises that have happened in the meantime. Check your expiry date so you have time to review your options.
Should I fix my rate before the decision?
Not necessarily. Fixed rates often rise ahead of the cash rate because lenders price in what they expect, so fixing now may not lock in a lower rate than the market already expects. Fixed loans also tend to have fewer features and can carry break costs if you sell or refinance early. Whether fixing suits you depends on your circumstances.
Will a rate rise affect my pre-approval?
It might. Lenders assess your ability to repay at a rate above the actual loan rate, so a higher rate can reduce how much you can borrow. Pre-approvals are conditional and time-limited, and a lender may reassess yours at current rates before giving formal approval.
Do higher rates mean house prices will fall?
Not always. Rate rises reduce borrowing capacity and can slow price growth, but prices also depend on housing supply, population growth and buyer confidence. Results vary between cities, suburbs and property types.
What if the RBA holds the cash rate?
Your lender could still change your rate, as lenders adjust rates for other reasons too. Checking your loan, your buffer and your options is still worthwhile, and the RBA can change the cash rate at a later meeting.
What should I do if I can’t afford higher repayments?
Contact your lender as early as you can and ask about hardship assistance. The National Debt Helpline (1800 007 007) also offers free financial counselling. The earlier you ask, the more options are usually available.
Talk it through
If you’d like to understand how a rate rise could affect your loan, or whether your current setup still suits you, send us a message through niftylending.com.au. We can go through your situation and explain the options available across the lenders on our panel.
Satwinder Mann, Credit Representative 540065, Nifty Lending Services.
General information only. Not personal financial advice. Your circumstances may vary. Any lending is subject to lender assessment and criteria.
Sources: Reserve Bank of Australia cash rate and monetary policy statements. Repayment examples calculated by Nifty Lending Services using the assumptions stated above.
