What the RBA decided
At its meeting on Tuesday 29 September 2026, the Reserve Bank's Monetary Policy Board raised the cash rate target by 0.25 percentage points, from 4.35% to 4.60%. The new target takes effect from Wednesday 30 September. The decision was unanimous.
It is the fourth increase this year, after rises in February, March and May, and it leaves the cash rate a full percentage point above where it started 2026. The Board held the rate at its June and August meetings. The last time the target was this high was November 2011.
Source: Reserve Bank of Australia.
Why the Board moved
The Board's statement pointed to inflation running hotter than it had expected in August. It named three pressures: the broadening conflict in the Middle East, which has pushed global energy prices "much higher than had been assumed", fast-rising global prices for technology goods driven by AI-related demand, and continued pressure on capacity in the Australian economy. Higher fuel prices have started to flow through to the price of other goods and services, and businesses told the RBA's liaison program that they are raising prices or planning to.
The Board also acknowledged that the economy is slowing. House prices have fallen in most capital cities and new housing loans have "declined noticeably". Its judgement was that inflation is still too high regardless, and that tighter financial conditions are needed to bring it back to target "in a reasonable period".
It did not rule out going further. The Board said it will do what it considers necessary to return inflation to target, "including increasing the cash rate target further if needed".
What it means for home loan repayments
The cash rate does not set your home loan rate directly. Each lender sets its own rates and decides whether to pass a change on, by how much and from when. In practice, most variable rates follow the cash rate closely, and lenders usually announce their changes within days of a decision, with new rates starting a week or two later. We refresh every lender's published rates daily, so the averages in this article will show the rise as it flows through, and we will update this piece as lenders move.
Fixed rates work differently. They are priced on where lenders expect rates to go rather than where the cash rate sits today, so many had already moved before this decision. If you are on a fixed rate, your repayments will not change until your fixed term ends.
On 30 September 2026, the average variable owner-occupier principal and interest rate across the 417 products we track was 6.63%. That reading was taken before lenders had repriced. If the full 0.25 percentage points is passed on, the average moves to 6.88%. Here is what that does to monthly repayments on a 30-year principal and interest loan:
| Loan amount | Repayment at 6.63% | Repayment at 6.88% | Extra each month |
|---|---|---|---|
| $500,000 | $3,203 | $3,286 | $83 |
| $600,000 | $3,844 | $3,944 | $100 |
| $750,000 | $4,805 | $4,929 | $125 |
| $1,000,000 | $6,406 | $6,573 | $166 |
The four rises add up. A borrower whose variable rate has gone up by the full 1.00 percentage point since January is now paying about $390 a month more on a $600,000 loan than they were at the start of the year, or roughly $4,700 a year.
These figures are estimates for illustration. They assume the whole balance is on the variable rate over a full 30-year term. Your own change depends on your balance, your remaining term and what your lender actually passes on. You can run your own numbers with our Home Loan Calculators.
What borrowers will see next
- When the change takes effect. Lenders write to borrowers with the new rate and repayment. The letter can arrive after the new rate has already started.
- Where rates sit across the market. The average hides a wide spread. Half of the variable owner-occupier principal and interest loans we track were priced at or below 6.23% on 30 September, well under the 6.63% average. A long tail of higher priced loans pulls the average up.
- Rate reviews. Lenders can review an existing borrower’s rate on request, and asking costs nothing. It is a separate step from switching lenders.
- Fixed rate expiry. When a fixed term ends, the loan usually rolls onto a variable rate, and that rate already includes this year's rises.
Rates across the market are on our Home Loans page.
What it means for savers
A higher cash rate is usually good news for savers, although deposit rates tend to follow more slowly and less completely than loan rates. Bonus rates on savings accounts and term deposit rates are where changes normally show first.
On 30 September 2026, the average bonus rate across the savings accounts we track was 4.10%, and the average base rate was 1.78%. Both sit below the new 4.60% cash rate. The average 12-month term deposit rate was 4.94%, the only term where the average still sits above the cash rate.
Where a savings account only pays its bonus rate when monthly conditions are met, the base rate is what it earns in any month they are missed.
Current rates are on our Savings Accounts and Term Deposits pages.
Where rates stood on 30 September
Averages across every product we track in each category, read on 30 September 2026, set against the new 4.60% cash rate. Most lenders had not yet repriced when these were taken, so the gap between loan rates and the cash rate will widen again as they do.
| Market | Average rate | vs cash rate |
|---|---|---|
| Home loans (variable, owner-occupier, principal and interest) | 6.63% | +2.03 |
| Savings accounts (bonus rate) | 4.10% | -0.50 |
| Term deposits (12 months) | 4.94% | +0.34 |
| Personal loans | 9.36% | +4.76 |
| Car loans | 7.80% | +3.20 |
| Credit cards | 16.46% | +11.86 |
Every figure is an average taken from each provider's own published Consumer Data Right data and recalculated daily. The live figures below update as lenders pass on the rise.
Average home loan rates today
- Average comparison rate*
- 6.97%
- Lowest advertised
- 4.74% (4.74% comparison rate*)
- Median
- 6.44%
- Variable, owner-occupier, P&I
- 6.85% (6.97% comparison rate*)
- Variable, owner-occupier, interest only
- 7.54% (7.49% comparison rate*)
- Variable, investor, P&I
- 7.15% (7.28% comparison rate*)
Across 389 products from 101 providers, as at 19 Oct 2026. Loans with no published comparison rate are left out unless we list them anyway, and never count in the lowest advertised rate or the average comparison rate. See every segment and how it has moved.
Cash rate source: Reserve Bank of Australia.
When is the next decision?
The Monetary Policy Board next meets on 2 and 3 November 2026, with its decision due on Tuesday 3 November. We will update our rate tables as lenders publish their new rates.
Comparison rate warning
*Warning: the comparison rate shown is calculated by the lender on its own standard example, usually a $150,000 loan over 25 years. This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.