The Reserve Bank held the cash rate at 4.35% in August. Five weeks on, the mood has flipped: the big banks’ economists now expect a 0.25% rise at the RBA’s meeting on Tuesday 29 September, taking the cash rate to 4.60%, and financial markets have priced in roughly a 90% chance of it.
What changed? Oil has jumped from around US$80 to above US$100 a barrel, the economy has run hotter than expected, and Governor Michele Bullock has said some of the upside risks to inflation “appear to be materialising”. Underlying inflation is still sitting above the RBA’s 2–3% target band.
A forecast, not a certainty
This is what forecasters expect, not a done deal, and the RBA can surprise. We’ll update this page after the 2:30pm announcement on 29 September.
What 0.25% actually costs you
Here’s the extra monthly repayment on a 30-year principal-and-interest loan. Usefully, it barely changes with your starting rate, so these figures hold whether you’re paying 6% or 6.5% today:
| Loan balance | One rise (+0.25%) | Two rises (+0.50%) |
|---|---|---|
| $500,000 | ~$81 a month | ~$163 a month |
| $750,000 | ~$121 a month | ~$244 a month |
| $1,000,000 | ~$162 a month | ~$325 a month |
| $1,250,000 | ~$202 a month | ~$406 a month |
The two-rise column isn’t idle speculation. ANZ expects a second increase in November, which would take the cash rate to 4.85%. CBA’s base case is one and done, but it says a strong September-quarter inflation figure could put another rise on the table.
Four moves worth making now
- Find out what you’re actually paying. Many borrowers on older loans pay well above what lenders offer new customers, and a rise stacks on top of that gap. A free rate review takes fifteen minutes and tells you whether switching beats staying.
- Put your buffer to work. Savings sitting in a separate account can do more in an offset account, where every dollar cuts the interest charged at your home-loan rate.
- Don’t panic-fix. Fixed rates are set by what lenders expect rates to do, so an expected rise is usually already priced in. Fixing can still make sense for certainty, but it’s a trade-off, not a free win. Fixed vs variable, explained.
- Buying? Re-check your borrowing power. Lenders assess your loan at the current rate plus a buffer, so a higher rate means a smaller maximum loan. A pre-approval issued before 29 September can come in lower at formal approval. How much less you can borrow.
The bigger picture
Rising rates and falling prices are two sides of the same coin: when borrowing costs more, buyers can pay less, and prices adjust. For owners, the pressure lands on repayments. For buyers, the same conditions mean fewer rivals and more room to negotiate, as long as your finance is solid before you bid.
If repayments are already tight, here are your options, and your rights. Acting before you miss a payment keeps the most doors open.
Common questions
How much will my repayments go up if rates rise 0.25%?
About $81 a month for every $500,000 you owe on a 30-year principal-and-interest loan, or roughly $162 a month on $1 million. The exact figure depends on your balance, remaining term and whether your lender passes on the full rise.
Will my bank pass on the full rise?
Lenders usually pass RBA increases on to variable rates, often within a couple of weeks, but the timing and size are each lender's own decision. A fixed rate does not change until its fixed term ends.
Should I fix my rate before 29 September?
It depends on your situation. Fixed rates already reflect what lenders expect rates to do, so an expected rise is often built into them. Fixing buys certainty, but usually limits extra repayments and offset use, and breaking a fixed loan early can be costly. Run the numbers on your own loan before deciding.
Does a rate rise reduce how much I can borrow?
Yes. Lenders test whether you can repay at your loan rate plus a buffer, so a higher rate lowers the maximum they will lend. If you hold a pre-approval, have it re-checked before you bid.
Sources: CommBank newsroom, Finder, RBA. General information only, not financial or credit advice. Forecasts are the views of bank economists and markets at 24 September 2026 and may prove wrong. Repayment figures are estimates for a 30-year principal-and-interest loan.
