RBA Cash Rate Decision 2026

What Did the RBA Decide?

On September 29, 2026, the Reserve Bank of Australia's Monetary Policy Board voted unanimously to raise the cash rate by 25 basis points to 4.60%. It was the fourth increase of 2026, following hikes in February, March, and May and holds in June and August. The Board said inflation 'remains elevated' and warned it would raise rates further 'if needed'.

Unlike some other markets, most Australian home loans are variable rather than fixed for long periods, which means RBA hikes tend to flow through to actual borrower repayments faster and more directly than in markets dominated by long-term fixed products. The next decision is due at the November 2-3 board meeting, after September-quarter inflation data lands on October 28.

How the Cash Rate Reaches Your Repayments

The cash rate is the benchmark the RBA sets for overnight lending between banks, and Australian lenders typically adjust their variable home loan rates within days to a few weeks of a cash rate change, passing some or all of the movement through to borrowers. Because a large share of the market is on variable rates, a hold generally means variable repayments stay where they were, at least until the next scheduled announcement.

Fixed-rate home loans in Australia are usually only fixed for a set period, commonly one to five years, after which they roll onto a variable rate unless refixed. Fixed pricing during the fixed term is set in advance and doesn't move with each RBA decision, but the rate offered on new fixed loans does shift based on where the market expects the cash rate to head.

What a Hold Means If You're on a Variable Rate

If you're on a standard variable home loan, expect your lender to announce its response within days to a few weeks of the decision; lenders began passing the September rise through in early October. A full 0.25-point pass-through adds roughly $16 a month for every $100,000 you owe on a 30-year principal-and-interest loan: about $98 a month on a $600,000 balance.

For borrowers who fixed a rate a few years ago and are approaching the end of that fixed term, the more relevant number is where current variable and new fixed offers sit relative to what you locked in. Rolling off a 2-3% fixed rate into a 6.5-7% variable rate remains the sharpest payment shock in the market, and this hike widens it.

Serviceability Buffers Still Apply Regardless

Whatever the cash rate does on any given announcement, Australian lenders continue to assess new borrowing using a serviceability buffer, testing whether you could still service the loan at an assessment rate well above your actual offered rate. A hold doesn't change that buffer, so your maximum borrowing power under lender assessment criteria stays governed by the same conservative assumptions either way.

See our borrowing power guide for how banks combine income, expenses, and buffers to size a loan, and use the calculator below to model how a rate change would actually affect your repayment.

Model Your Repayments at Today's Rates

Use our free Australia home loan calculator to compare repayments at your current rate against a stressed or higher rate, and to see how refinancing or extra repayments would change your position over the loan term.

• Open Australia Mortgage Calculator

Sources

The figures and policy details in this article come from the following primary sources, checked at the time of writing.

• RBA media conference, 29 September 2026 monetary policy decision