RBA Hikes to 4.60%: What It Means for Your Mortgage

Sarah is 36, a secondary school teacher in Melbourne. She has a $620,000 variable-rate mortgage she took out in 2023. In 2025 she got some relief — the RBA cut three times, dropping the cash rate to 3.60%. Her monthly repayment fell by about $280. That relief is gone. The RBA has raised four times in 2026, taking the cash rate to 4.60%, its highest level since 2011. Sarah is paying approximately $375 more per month than she was at the 2025 low. Over a year, that is $4,500 she does not have.

Most Australian home loans are on variable rates, so each rise flows through to repayments. According to Roy Morgan Research, 1,718,000 Australians — 32.3% of mortgage holders — were at risk of mortgage stress in the three months to August 2026, before the September rise. Its July reading of 32.5% was the highest in 18 years.

Australia Interest Rate Forecast: What the Big Four Expect

The Australian cash rate is 4.60%, set on 29 September 2026. It is the highest since November 2011. In early October 2026, two of the big four banks expected another rise on 3 November and two expected a hold.

Sources: Canstar (1 October 2026); Aussie (6 October 2026). These are bank economists' forecasts, not commitments, and they change as new data comes out. The RBA does not give forward guidance on its decisions.

Want any of these scenarios in your own numbers? The RBA rate change calculator shows what a 0.25% or 0.50% move in either direction does to your exact repayment — and if you save your loan there, the new cash rate is applied to it automatically after each decision.

When will Australian interest rates drop?

The RBA has given no timing for a cut. In its 29 September 2026 statement the Board said inflation is still too high and that it will raise the cash rate further if needed. In August it said it did not expect inflation back near the midpoint of the 2–3% band until late 2027. Aussie's round-up of the big four's forecasts (6 October 2026) has the earliest first cut in August 2027. Three signals matter for a cut: underlying inflation back inside the 2–3% band, a weaker labour market, and slower wage growth.

Are interest rates likely to go up again in Australia? They went up on 29 September 2026, to 4.60%, and the RBA says it will raise the cash rate further if needed. In early October, ANZ and Westpac expected another 0.25 rise on 3 November, to 4.85%, while CBA and NAB expected a hold. Do not plan your budget around cuts. See the next-rate-move repayment table below for the dollar impact, or model your own loan with the Velofy loan calculator, which includes a ±0.25% toggle.

Four Rate Rises in 2026: The Running Total

After cutting the cash rate three times in 2025, to 3.60%, the RBA reversed course in February 2026 to bring inflation down. Each rise was 0.25 of a percentage point. It held in June and August, then raised again on 29 September, the fourth rise of the year.

Monthly repayment estimates for a $600,000 owner-occupier loan, principal and interest, 25 years remaining, at the average variable rate. Dates are the days the RBA announced each decision; each rise took effect the next day. On a $750,000 loan the four rises add about $454 a month, and on $1,000,000 about $606. Source: Canstar (29 September 2026), RBA.

Who Is Most at Risk?

Roy Morgan counts mortgage holders as "at risk" when their repayments take more than a set share of after-tax household income, between 25% and 45% depending on income and spending. In the three months to August 2026, 1,718,000 Australians (32.3%) were in this group, and 1,207,000 (22.7%) were "extremely at risk", well above the 20-year average of 16.4%.

The households most exposed are those who borrowed heavily in 2021–2022, when the cash rate was as low as 0.10%. Lenders tested whether they could afford higher rates, but the rises since 2022 have used up much of that room. Borrowers with small deposits and large loans compared with their income have the least to spare.

How Much Do the Hikes Actually Cost You?

The monthly impact depends on your loan balance and remaining term. Each 0.25 rise adds about $15 a month per $100,000 owing, on a principal-and-interest loan with 25 years remaining.

Source: Canstar (29 September 2026). Owner-occupier, principal and interest, 25 years remaining, at the average variable rate.

What the Next Rate Move Means for Your Repayments

The September rise to 4.60% may not be the last. The table shows what each next move does to a $750,000 principal-and-interest loan over 30 years. It starts from a 6.5% variable rate, about the average rate on existing owner-occupier loans once the September rise is added (the RBA's figure was 6.24% in August 2026, before the rise). It assumes each RBA move is passed on in full.

Where the big banks sat in early October 2026: ANZ and Westpac expected a rise to 4.85% on 3 November; CBA and NAB expected a hold (see the forecast table above).

In short: one 0.25 move changes the repayment on $750,000 by about $124 a month. Your own rate can matter more. Ask your lender for a lower one, or refinance if your rate is well above what new customers are offered.

How to Cut Your Repayments

The quickest moves are to ask your lender for a lower rate, keep savings in an offset account and pay fortnightly. All five steps, with worked examples, are in 5 Ways to Cut Your Mortgage Without Refinancing.

If your rate is 0.5% or more above what new customers are offered, compare refinancing; the current cashback offers are in our refinancing guide. If you are falling behind on repayments, see how to get hardship help.