Third RBA Hike in a Row: How to Protect Your Repayments

Five lenders have lifted variable rates following the RBA's third consecutive hike, pushing the average owner-occupier variable rate to 6.43%.

What Just Happened

The Reserve Bank of Australia has delivered its third consecutive cash rate increase, and lenders are moving quickly to pass costs through to mortgage customers. Australian Broker reports that five lenders have collectively lifted 35 owner-occupier and investor variable rates, with average increases of 0.25 percentage points. On the fixed rate side, nine lenders increased 152 owner-occupier and investor fixed rates, with average rises of 0.33 percentage points -- and further changes are still expected across the market.

Around 60 lenders have confirmed they will pass the May RBA increase on in full to variable borrowers, with effective dates ranging from 8 May through to June. Most customers of the major banks will be feeling the effect of higher repayments from this Friday.

The average variable rate for owner-occupiers paying principal and interest now sits at 6.43%. A market-low variable rate sits at 5.49% -- a gap of 0.94 percentage points between the sharpest available offer and what most borrowers are actually paying. That spread represents a meaningful amount of money over the life of a loan.

One lender bucked the trend: ING trimmed four owner-occupier and investor variable rates by 0.10 percentage points, effective 2 May. It is a reminder that competitive tension has not entirely evaporated, even when the broader market is moving upward.

Are Good Rates Still Out There?

Yes -- but you have to look for them. Australian Broker reports that 82 rates remain below 5.75% across the market, unchanged from the previous week. This is significant because sharp deals still exist for borrowers who are willing to compare and act.

If you have not reviewed your home loan in the past 12 months, there is a reasonable chance your rate has drifted well above what is currently available. The 0.94-percentage-point gap between the average variable rate and the market leader is not trivial -- on a large loan balance, it translates directly into hundreds or thousands of dollars in additional interest each year.

[Check what the cheapest home loans look like right now](/home-loans/cheapest) and benchmark your current rate against the market. Then [run a repayment calculation](/calculators/repayment) to understand the dollar impact of a rate reduction on your specific loan size and remaining term.

For borrowers who have been sitting on a higher rate, refinancing could meaningfully improve monthly cash flow. [Estimate your potential refinancing savings](/calculators/refinance-savings) before your next repayment cycles through -- there are still 82 rates below 5.75% available to eligible borrowers.

Is the RBA Done Yet?

That is the question on every borrower's mind right now, and there is no consensus. Australian Broker reports that forecasts among the major banks remain divided on whether the Reserve Bank has finished its tightening cycle. The risk of further hikes has not disappeared.

Rate analyst Sally Tindall put it plainly: "What this means for borrowers is that they should start planning for at least one more hike, two if they're being prudent."

That is the right framing. Borrowers already stretched at current rates need to ask honestly: what happens to my repayments if the cash rate rises by another 0.25 or 0.50 percentage points? If the answer feels uncomfortable, acting now -- while 82 rates remain below 5.75% -- is more sensible than waiting for the next announcement.

What Borrowers Should Do Right Now

**Review your rate today.** With the average variable rate at 6.43% and a 0.94-percentage-point spread to the market's sharpest offers, sitting on an older, unreviewed rate carries a real cost. A conversation with a mortgage broker takes an hour and can potentially identify savings worth thousands annually.

**Know your numbers.** Be clear on your current interest rate, your loan balance, your loan type -- variable, fixed, or split -- and when any fixed-rate period expires. Many borrowers rolling off fixed rates in the coming months will step onto variable rates significantly higher than they have been paying. Preparing now, rather than absorbing the shock at rollover, puts you in a far stronger position.

**Consider refinancing.** With 82 rates below 5.75%, there is genuine competition for quality borrowers. Lenders are still actively seeking customers, and refinancing -- particularly for borrowers with equity above 20% -- can yield a material rate improvement. [Explore refinancing options now](/home-loans/refinance).

**Stress-test your budget.** Model what your repayments look like if rates rise by a further 0.25 to 0.50 percentage points. If you are comfortably inside that scenario, you are well positioned. If not, it is better to know and act now.

Three rate hikes in three consecutive RBA meetings reflects a central bank still responding to inflation pressures. The prudent response from borrowers is not panic -- but it is not passivity either. Reviewing your loan, understanding your options, and acting on better rates while they remain available is exactly the kind of proactive financial management that pays dividends over the life of a mortgage.

[Read the full rate movement report at Australian Broker.](https://www.brokernews.com.au/news/breaking-news/borrowers-urged-to-brace-as-lenders-reopen-rate-hike-floodgates-289333.aspx)