Each 0.25 percentage point rate rise adds about $16 a month for every $100,000 you owe on a 30-year loan at today’s rates. On a $600,000 loan that’s about $99 a month, or close to $1,200 a year. The RBA has raised the cash rate four times in 2026, to 4.60%, so a borrower with a $600,000 variable loan is paying roughly $388 a month more than in January if their lender passed each rise on in full.
How much a rise adds to your repayments
Monthly principal and interest repayments over 30 years, starting from the average variable rate of 6.63%:
| Loan amount | Repayment at 6.63% | Extra per 0.25% rise | Extra after the four 2026 rises (1.00%) |
|---|---|---|---|
| $400,000 | $2,563 | $66 | $259 |
| $600,000 | $3,844 | $99 | $388 |
| $800,000 | $5,125 | $132 | $517 |
| $1,000,000 | $6,406 | $164 | $647 |
Our calculations, excluding fees. Try your own numbers in our mortgage repayment calculator.
How the 2026 rises have added up
For a $600,000 loan over 30 years where each rise was passed on in full:
| After the RBA decision in | Cash rate | Typical variable rate | Monthly repayment |
|---|---|---|---|
| January 2026 (start of year) | 3.60% | 5.63% | $3,456 |
| February 2026 | 3.85% | 5.88% | $3,551 |
| March 2026 | 4.10% | 6.13% | $3,648 |
| May 2026 | 4.35% | 6.38% | $3,745 |
| September 2026 | 4.60% | 6.63% | $3,844 |
Illustrative only. Lenders set their own rates and don’t always move by exactly the cash rate change.
How quickly lenders pass on a rise
Most major lenders announce their response within a few days of an RBA decision, with the new variable rate taking effect for existing customers about one to two weeks later. Your lender will notify you of the new repayment. Fixed rate borrowers aren’t affected until their fixed term ends. See what the RBA cash rate means for your home loan.
Why rate rises hit harder over time
- Rises compound. Four rises in a year add up to a much bigger change than any one rise suggests.
- Fixed terms end. Borrowers who fixed when rates were lower roll onto today’s higher variable rates when their term expires.
- More of each repayment goes to interest. At higher rates, a larger share of each repayment covers interest, so the balance falls more slowly.
Steps to cushion the impact
- Check your budget against the next rise. Assume at least one more 0.25% rise. The RBA has said it will raise rates further if needed.
- Build an offset buffer. Money in an offset reduces interest and is available if things get tight.
- Ask your lender for a better rate. Many lenders will reprice existing customers who ask. See how to negotiate a lower rate.
- Consider fixing part of the loan if your budget couldn’t absorb more rises. See fixed rate home loans.
- Extend the loan term as a short-term fix. This lowers repayments but adds interest over the life of the loan. See extending your loan term.
- Contact your lender early if you’re struggling. Lenders must consider hardship requests. Options can include a temporary repayment reduction, a short repayment pause or extending the term.
What rate rises mean for property prices
Higher rates reduce how much people can borrow, which tends to cool price growth, though the effect varies by market and takes time. See how property prices and interest rates are linked.
Where rates go next
For the latest decision, current averages and bank forecasts, see rate trends and outlook.
Frequently asked questions
How much do repayments rise per 0.25% rate increase?
At current rates, about $16 a month for every $100,000 borrowed over 30 years. That’s about $66 a month on a $400,000 loan, $99 on a $600,000 loan and $132 on an $800,000 loan.
How quickly do banks pass on RBA rate rises?
Most lenders announce their response within a few days of the RBA decision, and the higher variable rate usually applies to existing loans from one to two weeks later. Fixed rates don’t change until the fixed term ends.
What can I do if I can’t afford higher repayments?
Contact your lender as early as possible and ask about hardship assistance. Options can include temporarily reduced repayments, a short pause or extending the loan term. You can also ask for a lower rate, use offset savings, or speak to the free National Debt Helpline on 1800 007 007.
Sources
- Reserve Bank of Australia, Monetary Policy Decision, 29 September 2026
- Canstar, Average home loan interest rates, as at 2 October 2026
- ASIC Moneysmart, Pay off your mortgage faster
General information only. It does not consider your objectives, financial situation or needs and is not credit advice.