Spring has sprung, but the outlook’s not so rosy for home loan borrowers, with the fourth cash rate hike of the year now locked in.
The Reserve Bank of Australia (RBA) board raised the cash rate by 25 basis points to 4.60% today — its highest point since late-2011.
The news comes as no surprise, with July CPI figures showing core inflation sticking stubbornly at 3.6% for the third month in a row.
This, coupled with higher oil and fuel prices thanks to the ongoing Middle East conflict, likely influenced today’s cash rate call.
How could this cash rate hike affect you?
The impact you’re most likely to feel will depend on whether you’re more concerned with your home loan or your savings account.
What does the RBA’s September hike mean for my mortgage?
When the RBA moves, banks and lenders are usually quick to update their own home loan interest rates, so mortgage holders are likely to feel the pinch.
If your mortgage was $750,000 when the current round of hikes began and your bank passes today’s hike on in full, you’re potentially facing an extra $114 in monthly repayments.
If your bank passed on the three previous hikes too, then combined with today’s hike, your repayment could soon be $454 a month more expensive than it was in February.
Loan size at start of hikes | Extra monthly repayment after September hike | Total increase across four hikes |
|---|---|---|
$500,000 | $76 | $303 |
$600,000 | $91 | $364 |
$750,000 | $114 | $454 |
$1,000,000 | $152 | $606 |
Source: Canstar. Based on an owner-occupier making principal and interest repayments with 25 years remaining on their loan term in February 2026, realising the average variable rate as per the RBA. Figures assume a rate hike in September, with banks passing it on from the following month. Changes refer to minimum repayments.
What does the RBA’s September hike mean for my savings?
On the other hand, rising rates can be good for savers — as long as your bank passes the benefit on to you.
Canstar analysis from early September found that banks have so far been fairly selective when passing this year’s RBA hikes onto savers .
Many banks boosted bonus rates on savings accounts, rather than base rates.
In such cases, savers would only realise the higher rate if they meet monthly conditions, which commonly include growing their balance or not making any withdrawals.
We surveyed more than 3,000 Aussies in 2025, finding only about three in five actually meet the criteria to earn their bonus rate each month.
In other words, unless you’re savvy when it comes to stashing away money, your savings account balance may not see too big a bump from today’s cash rate hike.
Term deposit rates will likely increase, but with more cash rate hikes potentially on the way, locking in now could mean missing out on future rate bumps, if they occur.
Does the RBA have more interest rate hikes up its sleeve?
A few short months ago, economists at the big four banks were all predicting we’d seen the last cash rate hike for 2026, but the landscape has changed enough since that a fifth hike could still be on the table.
The RBA board meets again in November, with ANZ the only big four bank forecasting back-to-back rate rises. It predicts the RBA will hike the cash rate to 4.85% next month, launching it to its highest setting since 2008.
The next cash rate call will be announced on Tuesday, November 3, but the key date to keep an eye on is October 28. That’s when CPI figures that allow experts to look back on the September quarter come out, and these will likely have a big impact on the RBA’s decision.
If the quarterly CPI numbers reassure the bank’s board that inflation is cooling, we may see rates held steady in November. However, if they show inflation sticking too high, or even heating up, a cash rate rise may be more likely.
Time to take your home loan rate into your own hands?
If it’s been a while since you took a good look at your own home loan, you can see how it stacks up against some of the sharpest rates on Canstar’s database.
Curious about how mortgage rates look right now? Lenders will likely change their rates after today’s RBA move, but for now, here’s a selection of the lowest advertised variable home loan rates on Canstar’s database:
Lender | Lowest interest rate | Comparison rate |
|---|---|---|
Pacific Mortgage Group | 5.69% | 5.69% |
The Mutual Bank | 5.79% | 5.79% |
P&N Bank | 5.83% | 5.86% |
Greater Bank | 5.84% | 5.85% |
Virgin Money | 5.84% | 5.86% |
BCU Bank | 5.84% | 5.87% |
Source: Canstar. Interest rates based on owner occupier loans. LVR limits and other requirements apply. Excludes green loans, limited eligibility loans, and first home buyer-exclusive loans.
