Fixed Rates Surge as Lenders Price In More RBA Hikes
With 289 fixed rates already lifted and variable rates still moving, here's what the RBA's fourth 2026 hike means for your mortgage.
Four Rate Hikes In, and the Pain Isn't Over Yet
The Reserve Bank of Australia raised the cash rate by 25 basis points to 4.6% on 29 September — its fourth increase of 2026 and the highest level since late 2011. For anyone with a mortgage, the cumulative effect is significant. A borrower with a $600,000 home loan is now paying $364 a month more than before the first of this year's four hikes, once the latest rise is passed on in full. The September hike alone adds around $91 a month to the same loan, MPA Australia reports.
That $91 doesn't land in isolation. It follows three earlier increases that have already trimmed household budgets considerably. The combined toll — $364 more every month — works out to $4,368 extra a year in repayments on a $600,000 loan compared with the start of 2026.
In the week following the RBA's September decision, 17 lenders — including NAB — raised 289 fixed rates by an average of 0.24 percentage points, according to industry tracking. "The fixed moves are the ones to watch, because lenders are not just passing on September's hike," mortgage research manager Josh Sale told MPA Australia. Lenders are also pricing in higher bond yields and the chance of a further RBA increase, following tightening by central banks in the US, Europe, and Japan during September.
For variable rate borrowers, the repricing isn't done. Over the same week, seven lenders lifted 49 owner-occupier and investor variable rates by an average of 26 basis points. Most increases were yet to take effect at time of writing, with the bulk expected over the next few weeks. "Variable borrowers should treat the next few weeks as a moving target," Sale said, noting that most lenders had yet to fully respond to the new 4.6% cash rate.
Where Variable Rates Stand Right Now
The average variable rate for owner-occupiers paying principal and interest now sits at 6.63%. The sharpest variable rate currently available in the market is 5.69%, from Pacific Mortgage Group. Only two lenders remain below the 5.75% mark, and Sale expects neither to hold that position once repricing runs its course.
That gap between the best available rate and the average is closing in on a full percentage point — a difference worth taking seriously. On a $600,000 loan over 30 years, shaving one percentage point off your rate saves roughly $370 a month. If you haven't reviewed your rate recently, it may be time to check what's available. Our refinance savings calculator can show you the dollar difference, and the cheapest home loans page compares rates currently on offer.
Will There Be a Fifth Rate Rise?
Whether a fifth hike follows is now a live debate. The big four banks are split. Commonwealth Bank and NAB expect the 4.6% cash rate to mark the peak of this tightening cycle, while Westpac and ANZ are forecasting at least one more increase, possibly in November.
The September quarter inflation data, due on 28 October, will be the critical data point. Headline inflation reached 4% in August, a four-month high, while the RBA's preferred underlying measure held at 3.6%. Unemployment, meanwhile, has risen to 4.6% — its highest level in almost five years — suggesting the economy is slowing even as inflation remains elevated.
For borrowers, the divide among economists argues for reviewing your position now rather than holding out to see what happens. Whether the cash rate rises again or holds at 4.6%, the repricing that has already occurred since September has widened the spread between lenders to a level that is worth acting on. Explore your refinance options or use the borrowing power calculator to see how the current rate environment affects what you can borrow.