What’s happening with interest rates?

After 13 rate rises starting in May 2022—raising the cash rate from 0.10% to 4.35%—the Reserve Bank of Australia (RBA)’s Monetary Policy Board (MPB) made two cuts in February and May 2025, bringing the cash rate down to 3.85%. At its August 2025 meeting, the MPB again cut the cash rate by 25 basis points to 3.60%.

After several meetings where rates were held steady, the MPB has chosen to raise the cash rate back to 3.85% at its February 2026 meeting.

The MPB, which meets eight times per year, assesses a range of data before making any cash rate decisions.

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Rate changes for Owner Occupier Variable

Home Loan Rates

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Table last updated 09 February 2026. Table sort order based on latest known owner occupier variable rate change by big four banks, then alphabetically. Excludes intro rates, green or eco loans. Lowest rates listed reflect current variable interest rates, plus 25 basis points unless specified by the lender.

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Why do interest rates change?

The RBA is Australia’s central bank. The bank and its Monetary Policy Board must follow a specific charter, which includes maintaining stable employment and keeping inflation, specifically ‘trimmed mean’ inflation, within what’s called the ‘target band’ of 2% – 3%.

The MPB’s only tool to maintain stability is raising or lowering the cash rate. It meets regularly to assess a large range of data and make a decision to either hike, hold or cut the cash rate.

The most recent increases to the cash rate, which started in May 2022, were due in part to a significant rise in the level of inflation for Australia, which was tracking at a headline rate of 7.8% in the December 2022 quarter—far higher than the target band.

While the level of inflation lowered over time leading to last year’s cash rate cuts, the Board continues to maintain a close eye on other economic activity and results, with a clear directive that the cash rate will only be cut when it believes the level of trimmed mean inflation will return to 2% – 3% sustainably.

How do cash rate changes impact your home loan?

The cash rate, which is set by the MPB, is essentially the rate of interest that banks and lenders have to pay when they borrow money from other banks or lenders. 

When the cash rate goes up, so does the amount of interest banks have to pay. This impacts the amount of money that you, as their customer, will then have to pay for borrowing from them in the form of a loan.

How can I compare home loans? 

If you’re looking for a low fixed or variable rate for a new home loan or to refinance, you can compare home loans with Canstar.

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