Australian mortgages are now priced off the highest official cash rate in 15 years. On 29 September 2026, the Reserve Bank of Australia (RBA) lifted the cash rate by 25 basis points to 4.60%, its fourth increase this year and a full percentage point of tightening since January (Commonwealth Bank of Australia [CBA], 2026).

If you hold a variable loan, plan to buy in the next six months or are sitting on a pre-approval, your numbers have changed. Here is what happened and what to do about it.

What did the RBA decide in September 2026?

The RBA’s Monetary Policy Board voted unanimously to raise the cash rate target from 4.35% to 4.60% (CBA, 2026). It is the highest setting since 2011 (Bullock labels current rate, 2026).

The Board said some of the upside risks to inflation it identified in August were now materialising, with higher global energy prices and domestic capacity pressures adding to the outlook (CBA, 2026).

Why did the RBA raise interest rates again?

Inflation is moving the wrong way. The day after the decision, the Australian Bureau of Statistics (ABS) reported annual CPI inflation of 4.0% in the 12 months to August 2026, up from 3.5% in July. Trimmed mean inflation, the RBA’s preferred underlying measure, held at 3.6% (ABS, 2026). Both sit well above the 2 to 3% target band.

Governor Michele Bullock described the new setting as “restrictive” but said further rises remain possible if this year’s increases fail to cool inflation enough (Bullock labels current rate, 2026).

How much will a 4.60% cash rate add to my repayments?

Lenders set their own rates, so your exact increase depends on your loan. As an illustration, assume a variable rate rises from 6.60% to 6.85% on a 30-year principal and interest loan:

Across all four 2026 hikes (for example, 5.85% rising to 6.85%), that same $600,000 loan costs roughly $392 more per month than it did in January. These are our own calculations and assume each increase is passed on in full.

What happens to borrowing power when rates rise?

Banks assess your application at your actual interest rate plus a serviceability buffer. When the base rate rises, the assessment rate rises with it, so the maximum loan you can be approved for falls, even if your income and expenses have not changed.

If your pre-approval was issued before 29 September, do not assume the figure still holds. Ask your broker or lender to reassess it against the new rate before you bid at auction or sign a contract.

Will interest rates rise again in 2026?

The RBA has left the door open. Its statement said the Board would increase the cash rate further if needed to bring inflation sustainably back to target (CBA, 2026). A Finder survey found 48% of experts expect another increase before the end of the year (LIVE: RBA lifts interest rates, 2026). Bullock declined to comment on market pricing for two more rises to 5.10% (Bullock labels current rate, 2026).

The next major input is the September monthly CPI, due from the ABS on 28 October 2026 (ABS, 2026), ahead of the RBA’s November meeting.

What should buyers and investors do now?

Frequently asked questions

What is the RBA cash rate now? The cash rate is 4.60%, set on 29 September 2026.

Does a cash rate rise automatically increase my mortgage rate? No. Each lender decides how much of a change to pass on. Check your lender’s notice for your new rate and repayment amount.

When is the next RBA decision? The RBA’s next scheduled meeting is in November 2026.

This article is general information only and does not consider your personal circumstances. Speak to a licensed credit adviser before making borrowing decisions.

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