Three Rate Hikes in 2026: What Borrowers Should Do Now

Australia's cash rate is at 4.35% after three hikes in 2026. Here's what the August RBA decision means for your home loan repayments.

Three rate rises. One frustrated nation. If you've been watching the Reserve Bank of Australia's cash rate decisions with growing anxiety in 2026, you're not alone — and the experts calling for a hold at August's meeting say your frustration is completely warranted.

The RBA lifted the official cash rate by 25 basis points in February, March, and May this year, pausing in June. The rate currently sits at 4.35%, and with the August monetary policy meeting approaching, households across the country are waiting to see whether the central bank will hold or deliver a fourth hit.

MPA Australia reports that economic commentator David Koch has publicly called on the RBA to hold rates at its August meeting, arguing that the inflation driving rate hikes is coming from forces well beyond ordinary Australians' control.

"Australian households are doing it tough," Koch said. "Yes, inflation is going up, but that's not because of consumers spending too much. It's things outside of their control like petrol prices going up because of the conflict in the Middle East."

His point is blunt and, for many borrowers, validating: "Essentially they're getting another rate hike when they go to fill up the car."

The True Financial Weight of Three Rate Hikes

It's worth putting the numbers in front of you. On a typical loan of $735,000, a single further 25-basis-point rise would add approximately $120 to monthly repayments. That's a significant addition — but it comes on top of the three previous rises already embedded in every variable rate borrower's repayments.

Across different loan sizes, the monthly impact of a further 0.25% rise looks like this:

- **$500,000 loan:** an extra $81 per month - **$600,000 loan:** an extra $98 per month - **$750,000 loan:** an extra $122 per month - **$900,000 loan:** an extra $146 per month - **$1,000,000 loan:** an extra $163 per month

These figures assume an owner-occupied variable rate loan with a current rate of 6.15%, increased by 0.25%, with a 30-year loan term and no ongoing fees. They don't account for the gradual reduction of your loan balance over time.

Koch isn't alone in his read of the situation. "Some economists still see another rate rise before the end of the year," he acknowledged. "But families are already being hit from all sides, and another hike would only add to the squeeze."

The picture he paints is of households already in survival mode: "Consumers have gone into the bunker. They're cutting back wherever they can, but many of the biggest cost increases hitting household budgets are completely beyond their control."

What Borrowers Should Actually Do Right Now

Whether the RBA holds in August or not, a reactive stance isn't going to protect your finances. Here's what proactive borrowers are doing in the current environment.

**Step one: know exactly what you're paying.** If you've been on the same home loan for more than twelve months without a rate review, there's a real chance you're no longer on a competitive rate. The lending market has moved considerably in 2026, and some lenders have been cutting rates aggressively to attract refinancers. Use our repayment calculator to see exactly what your current rate is costing you each month.

**Step two: check your borrowing power.** Three cash rate rises in 2026 have materially reduced what lenders are willing to offer most borrowers. If you're house-hunting or planning an upgrade, run your numbers now so you don't find out mid-negotiation that your capacity has shifted.

**Step three: compare and act.** The difference between a competitive home loan and an average one is often 0.25% to 0.5% or more. On a $600,000 loan, that's $98 to $196 per month — more than $1,100 to $2,350 per year you're leaving on the table. Browse Australia's cheapest home loans and explore what refinancing could mean for you in practical terms. Even if you decide to stay with your current lender, knowing the market rate gives you leverage to negotiate.

Koch's advice to homeowners is straightforward: "review their finances regularly and seek opportunities to reduce costs." In practical terms, that means not waiting for the RBA to make your decision for you — the best time to review your home loan is now, not after the next rate rise has already hit.

*Source: MPA Australia*