RBA Lifts Rates to 4.6%: What Every Borrower Should Do Now
All four major banks plus Macquarie have passed on September's 0.25% rate rise in full. Here is your action plan before repayments rise in October.
Australia's major banks will lift variable home loan rates by 0.25 per cent from October, after the Reserve Bank of Australia raised the cash rate to 4.6 per cent — the highest level since November 2011. It was the fourth rate increase of 2026, and RBA Governor Michele Bullock was unambiguous: high inflation must come down.
"I know this decision is difficult for households with a mortgage and businesses with loans. But high inflation hurts all Australians, especially the most vulnerable," Governor Bullock told reporters after the September board meeting. "We need to stop this high inflation. It's critical that we stop expectations for high inflation from becoming embedded in price-setting decisions across the economy."
Australian Broker reports that Bullock acknowledged the decision was not taken lightly. "We knew that this was going to hit some people pretty hard. We know this. But we have to do it if we are to bring inflation back down. That's our mandate. And ultimately, in the long run, hopefully in the next couple of years, when we get inflation back down, this will all have been worth it."
The board also did not rule out another rise later this year. While Bullock described August's inflation figures as backward-looking, she confirmed the focus remained on keeping financial conditions tight enough to bring price growth back within the 2–3 per cent target band.
Every Major Lender Is Passing On the Full Rise
Within hours of the RBA's announcement, all four major banks — Commonwealth Bank, NAB, Westpac and ANZ — confirmed they would lift variable home loan rates by 0.25 per cent per annum, effective 9 October.
Macquarie Bank will lift its variable home loan reference rates from 15 October. The country's fifth-largest household lender holds about 7.4 per cent of the market and accounted for 24 per cent of the $159 billion growth in home lending over the past 12 months, according to Australian Prudential Regulation Authority data cited in its announcement. Teachers Mutual Bank — operating across its Teachers Mutual, UniBank, Firefighters Mutual, Health Professionals, and Australian Mutual Bank brands — also confirmed a full pass-through, effective 8 October.
CBA's group executive retail banking, Angus Sullivan, said the decision reflected persistent inflation and ongoing global uncertainty. NAB group executive personal banking, Ana Marinkovic, urged concerned customers to contact the bank early about their finances. Westpac's chief executive for consumer banking, Carolyn McCann, acknowledged the increase would impact households' cost-of-living pressures.
Ben Perham, head of personal banking at Macquarie Bank, put it plainly: "We encourage them to get in touch, as financial assistance may be available."
What Four Rate Rises Actually Cost You
The cumulative impact of four hikes in 2026 is substantial. ABC News reports that on a $505,000 loan over 30 years, four rate rises have added $322 a month to repayments compared to January this year — and that is not a one-off cost. It recurs every month for the life of the loan.
For borrowers in Sydney or Melbourne, where loan sizes are typically larger, the impact is considerably higher. AMP chief economist Shane Oliver estimates that an average wage earner on $109,000 can now afford to buy a property worth roughly $500,000 — yet median property prices across Australia sit around $900,000. That gap reflects an already severe affordability problem, now made worse by the rising rate environment.
There is some relief for savers: Macquarie will lift savings rates from 15 October, with balances up to $250,000 earning 5.25 per cent, up from 5.00 per cent. Teachers Mutual Bank will also raise variable savings rates by 0.25 per cent from 1 October.
What to Do Before Your Rate Rises in October
Your lender has likely already announced when the change takes effect. Here is how to respond.
**Review your current rate.** Variable rates have risen four times this year, but there is still significant variation between lenders. Some lenders have been cutting rates for new customers even while hiking for existing ones. That gap is real money if you can switch. Use our repayment calculator to model what your new monthly payments will look like from October.
**Check your borrowing power.** Four rate rises compress what you can comfortably service. Run a borrowing power calculation before making any property decisions so you are working with accurate numbers.
**Consider refinancing.** Even a 0.3 per cent difference on a $600,000 loan saves roughly $1,800 a year. Use our refinance savings calculator to see what switching could put back in your pocket each month, then compare refinance options to see what is available for your situation.
**Contact your lender if you are under pressure.** Every major lender included hardship support language in their rate announcements. If you are concerned about making repayments, contact your lender's hardship team as early as possible — the sooner you engage, the more options remain available.
Money markets are currently pricing around a 20 per cent chance of another rate hike at the November RBA meeting, according to LSEG data. Westpac's chief economist Luci Ellis has forecast one more rise before year end, conditional on the Middle East conflict and energy prices. Whether November brings another hike or a pause, acting on your current rate now puts you in a stronger position either way.
*For authoritative detail on the September decision, see Australian Broker's full coverage.*