The RBA cash rate is 4.60% after the Reserve Bank raised it by 0.25 percentage points on 29 September 2026, its fourth increase this year. Lenders usually pass cash rate changes on to variable home loan rates within days or weeks, while fixed rates move ahead of the RBA based on where markets expect rates to go. If you’re taking out a home loan now, budget for the possibility of more rises: the RBA has said it will increase rates further if needed.
What the cash rate is
The cash rate is the interest rate banks charge each other for overnight loans. The RBA’s Monetary Policy Board sets a target for it to keep inflation within its 2% to 3% target range and support employment. Because it affects banks’ funding costs, it flows through to the rates on home loans, savings accounts and business loans.
The Board meets eight times a year. Its next decisions are due on Tuesday 3 November and Tuesday 8 December 2026, announced at 2.30 pm AEDT.
The cash rate in 2026
| Decision | Cash rate | Change |
|---|---|---|
| February 2026 | 3.85% | Up 0.25 |
| March 2026 | 4.10% | Up 0.25 |
| May 2026 | 4.35% | Up 0.25 |
| June and August 2026 | 4.35% | No change |
| September 2026 | 4.60% | Up 0.25 |
Source: Reserve Bank of Australia. The RBA said in September that inflation risks had risen, with disruption to global oil supply pushing up fuel prices and capacity pressures adding to costs. See where home loan rates are heading.
How the cash rate affects your home loan
- Variable rate loans usually move by the same amount as the cash rate, a few days to a few weeks after each decision. Lenders aren’t required to pass changes on in full, and sometimes move their rates independently.
- Fixed rate loans don’t change during the fixed term. New fixed rates are priced on what markets expect the cash rate to be over the term, so they often move before the RBA does.
- Borrowing power falls as rates rise, because lenders test your repayments at your rate plus a 3 percentage point buffer.
- Savings rates usually rise and fall with the cash rate too, which also affects the value of money in an offset account.
The cash rate is only one part of your rate. Your LVR, loan purpose, repayment type and lender all matter. See what lenders consider when they price your loan.
What a rate change means in dollars
| Loan amount | Each 0.25% increase adds about | The four 2026 rises added about |
|---|---|---|
| $400,000 | $66 a month | $259 a month |
| $600,000 | $100 a month | $388 a month |
| $800,000 | $133 a month | $517 a month |
Our calculations for a 30-year principal and interest loan starting at the 6.63% average variable rate (Canstar, 2 October 2026), assuming lenders passed on each rise in full.
What it means for property prices
Higher rates reduce how much buyers can borrow, which usually cools property prices within months. National home values fell for six straight months to September 2026 as the rises took effect, according to Cotality.
What to do before your next home loan
- Budget for at least one more rise. Check your repayments at 0.5% to 1% above today’s rate.
- Compare the market. The lowest advertised variable rates are around a percentage point below the average.
- Decide how much certainty you need. Fixing part of the loan protects against further rises while keeping an offset on the rest.
- Build a buffer. Savings in an offset reduce interest now and give you breathing room if rates rise again.
Frequently asked questions
What is the RBA cash rate right now?
The cash rate target is 4.60%. The Reserve Bank raised it by 0.25 percentage points on 29 September 2026, its fourth increase in 2026 after rises in February, March and May. The next decision is due on 3 November 2026.
Do fixed rates follow the RBA cash rate?
Not directly. Fixed rates are priced on what markets expect the cash rate to be over the fixed term, so they often rise or fall before the RBA moves. Once you’ve fixed, your rate doesn’t change during the term, whatever the RBA does. In October 2026, average fixed rates were slightly below variable rates.
How many times a year does the RBA meet?
Eight times. The RBA’s Monetary Policy Board meets over two days and announces its decision at 2.30 pm on the second day. The remaining 2026 meetings end on 3 November and 8 December.
Sources
- Reserve Bank of Australia, Monetary Policy Decision, 29 September 2026
- Reserve Bank of Australia, Cash rate target
- Reserve Bank of Australia, 2026 Monetary Policy Board meeting dates
- Canstar, Average home loan interest rates, as at 2 October 2026
General information only. It does not consider your objectives, financial situation or needs and is not credit, tax or financial advice.