Big Four Banks Raise Rates: What Borrowers Should Do Now
All four major banks have confirmed they'll pass on the RBA's 0.25% October rate rise in full, lifting variable rates from 9 October 2026.
If you're sitting on a variable home loan, the news from 1 October was not what you were hoping for. The Reserve Bank of Australia (RBA) lifted the official cash rate by 0.25 percentage points, bringing it to 4.60%, and every one of Australia's four major banks moved quickly to confirm they would pass the rise on in full.
Effective from 9 October 2026, borrowers across CBA, Westpac, NAB, and ANZ will find their monthly repayments climbing again. MPA Australia reports it will also mark the departure of the last big bank variable rate starting with a 5 — a symbolic milestone that tells you everything about how far this cycle has run.
What the Banks Are Charging From 9 October
Commonwealth Bank moved first, confirming its increase on 30 September — the day of the RBA's decision. Westpac, NAB, and ANZ all followed.
Westpac's lowest advertised variable rate rises from 5.99% to 6.24%. CBA, NAB, and ANZ now start between 6.29% and 6.5%, with CBA's lowest variable rate sitting at 6.34%.
Under the Banking Code of Practice, lenders must provide at least 20 days' written notice before higher repayments are debited. Most banks allow two to three months.
The rate changes aren't limited to home loans. CBA also confirmed that eligible variable-rate business loans will rise by the same 0.25 percentage points from 9 October, flowing through to products such as BetterBusiness Loans and Business Overdrafts. "As inflationary pressures persist, many Australian businesses continue to face higher operating costs and tighter margins," said Mike Vacy-Lyle, CBA's group executive of business banking.
The Cumulative Hit to Your Budget
This isn't just one rate rise in isolation — it is the latest in a series, and the combined effect on mortgage repayments is now substantial.
For a borrower carrying $600,000 in variable debt who has experienced all five of this year's rate hikes, the cumulative increase in monthly repayments reaches approximately $456. This latest 0.25% rise alone adds around $92 per month to repayments on a $600,000 loan.
For those with $1 million in debt, the cumulative monthly increase across five hikes is approximately $759 per month.
Angus Sullivan, CBA's group executive of retail banking, acknowledged that borrowers will need to reassess. "For some customers, the immediate priority might be understanding how their repayments and budget may change and where adjustments can be made," Sullivan said. CBA has flagged fixed and split home loan structures as options for borrowers seeking more certainty on future repayments.
Use the repayment calculator to model exactly what your new monthly minimum will look like from October and compare it against your current budget.
Is November Going to Bring Another Hike?
The big four banks are currently split on whether November will deliver a further increase. Westpac and ANZ are tipping another 0.25% hike, while CBA and NAB are forecasting a hold. Westpac revised its call after weighing the inflationary impact of higher energy prices linked to the ongoing conflict in the Middle East. A November hike would take the cash rate to 4.85%.
The RBA will meet on 2–3 November. Before then, the September quarter CPI data and the latest labour force figures will give the board the evidence it needs. Australian Bureau of Statistics data already showed headline inflation rising to 4.0% in the year to August 2026, up from 3.5% in July. The RBA's preferred underlying measure — trimmed mean inflation — held at 3.6% for a third consecutive month, still above the 2%–3% target band.
There is a real possibility this is not the last rise of the year.
What to Do Before 9 October
The time between now and the effective date is worth using constructively.
First, find out exactly what rate you'll be on from 9 October and calculate your new minimum repayment. If your lender hasn't written to you yet, call them.
Second, consider whether this is the moment to compare refinance options. The gap between major bank variable rates (currently 6.24% to 6.5%) and the lowest-rate lenders in the market can still be meaningful — refinancing a $600,000 loan to a rate that is 0.5% lower could save you over $3,000 per year in interest.
Third, run the refinance savings calculator to see whether a switch makes financial sense after accounting for any exit fees and break costs.
CBA's Sullivan also flagged fixed and split loan structures for borrowers who want repayment certainty. Whether that makes sense for you depends on your specific circumstances and your assessment of whether rates are near their peak or still climbing.
One thing is clear: sitting on a variable rate above 6% without checking whether you can do better is leaving money on the table. With at least one more potential hike ahead, now is the right time to understand your options and act if the numbers stack up.
MPA Australia has the full breakdown of rate changes across all four major banks.