September Rate Hike Likely: What $427 More Means for You
With 90% of economists expecting the RBA to lift rates to 4.60% on Tuesday, here is what the expected hike means for your mortgage repayments.
Why Nine in Ten Economists Expect a Tuesday Rate Rise
A survey of 41 economists and property analysts reported by Property Update found an overwhelming majority — 37 out of 41, or 90% — expect the Reserve Bank of Australia to raise the cash rate by 25 basis points at its 29 September 2026 board meeting, lifting the rate to 4.60%.
The near-consensus is built on one persistent problem: inflation. Australia's underlying inflation has remained above the RBA's target band for more than five years, and recent data has done little to ease pressure on the board to act.
Dr Shane Oliver, Chief Economist at AMP, said the RBA's credibility was now at stake. "While the RBA is meeting its full employment objective, this is not the case for its inflation objective, with underlying inflation running well above target. After more than five years of having inflation above target the RBA risks further losing its credibility if it decides to extend its wait and see approach," Oliver said.
Sophia Angala from ANZ Research pointed to both domestic and global forces: "Underlying inflation has proved more persistent than expected, while the re-escalation in the Middle East conflict and higher oil prices have increased the risk of second-round inflation effects." ANZ Research's view is for the cash rate to be lifted at both the September and November 2026 meetings.
Even those predicting a hold acknowledged the decision was finely balanced. Evgenia Dechter from UNSW said: "Economic growth is weak and unemployment is rising, so the RBA has to weigh the risk of persistent inflation against the risk of slowing the economy too much."
Looking further out, 48% of the panel — 19 of 40 respondents — expect at least one additional rise before the end of 2026, with most pointing to November. If both hikes materialise, the cash rate would reach 4.85% by year end, its highest level in over a decade.
What This Means for Your Mortgage Repayments
For the average Australian borrower, these numbers translate directly to higher monthly costs.
Property Update's analysis shows that a rise to 4.60% would cost a borrower with an average home loan of $736,259 an extra $427 per month compared with repayments in January 2026 — approximately $5,124 more per year.
If a second hike follows in November, the cumulative impact climbs to $542 more per month than January 2026, or around $6,504 extra annually.
These figures apply to variable rate borrowers. If you are on a fixed rate expiring within the next 12 months, the moment your loan reverts could mean a significant jump. Using the borrowing power calculator now to model what your loan will cost at a higher rate is a smart first step before that revert date arrives.
For borrowers who have not reviewed their loan recently, a rate environment like this one delivers a clear message: what you pay is not a given. The gap between a competitive rate and an unreviewed one can easily represent thousands of dollars per year. Browse the cheapest home loans available to benchmark where the market currently sits.
What Borrowers Should Do Before Tuesday's Decision
Several economists in the survey pointed out that rate rises are a blunt instrument, with the burden falling disproportionately on mortgage holders and younger indebted households. Leanne Pilkington from Laing+Simmons said: "Interest rate increases are a blunt instrument which are having a disproportionate impact on people in the lower socio-economic demographic."
That is the macroeconomic reality borrowers have to work within. But there are practical steps you can take right now:
**Check your actual interest rate.** Log into your bank's app or call your lender to confirm the rate applied to your account. Many borrowers are on rates well above what is available to a new customer today.
**Model your new repayments.** Use the repayment calculator to see what your repayments will look like after a 25 or 50 basis point increase. Knowing the number removes the shock.
**Compare what's available externally.** Refinancing options for existing borrowers remain competitive. Lenders continue to pursue new-to-institution customers even as overall mortgage demand has fallen sharply.
**Act before the hike if you can.** Refinancing is assessed on your current income and obligations. Moving before another rate rise lands means your serviceability looks relatively better to a new lender than it will after November.
**Talk to a broker.** A good mortgage broker will look across multiple lenders and match your situation to the most appropriate product — the potential saving can easily exceed the cost of the rate rise you are trying to avoid.
Property Update reports on the full survey findings and economist commentary.