RBA Raises Cash Rate to 4.60%: September 2026 Mortgage Examples

What changed

The RBA increased its cash rate target by 25 basis points to 4.60% on 29 September 2026, effective 30 September. That is a 0.25 percentage point increase from 4.35%. The decision does not establish a new rate or repayment for an individual home loan.

Use the Mortgage Repayment Calculator with the lender's rate, current balance and remaining term. Entering 4.60% simply because it is the cash rate would model a different loan unless that is also the actual rate on the loan.

Why the Board increased the target

The RBA statement pointed to persistent inflation, higher energy costs and pressure on domestic capacity. The decision was unanimous. It described continuing uncertainty about inflation and economic activity; it did not commit to a particular next decision.

The RBA cash rate table records 30 September as the effective date. A lender's retail rate notice has its own effective date. Keep both dates distinct when updating a household budget.

Worked example: a loan rate moving from 6% to 6.25%

These are hypothetical rates, not lender offers or evidence of pass-through. Each row assumes principal-and-interest repayments, 25 years remaining, equal monthly periods and an unchanged balance at the point of comparison.

Amounts are calculated before rounding to cents. The model divides each annual rate by 12 and spreads repayment across 300 payments. It excludes fees, offsets, extra payments, interest-only periods and daily interest timing. Each selected rate is held constant for its scenario, which is not a forecast of rates over 25 years.

For the $600,000 example, an extra $92.21 each month is about $1,107 over 12 payments. That is a full-year scenario. It is not the extra cost for the remainder of 2026, and the first changed payment may cover a mixed-rate period.

The remaining loan term guide shows why replacing 25 years with a fresh 30-year term makes the estimated monthly payment look smaller while extending the repayment period.

Which part of the loan changes?

Read the lender's notice before changing the rate input. For a split loan, model the portions separately. Applying the same increase to a fixed portion and a variable portion would assume both changed, whether or not that happened. The split loan worked example shows how to add the separate repayment estimates.

The home loan rate change checklist covers the notice, minimum repayment and payment instruction. A changed interest rate, changed minimum repayment and changed direct debit are separate items to confirm.

For a budget comparison, keep the balance, term and repayment type unchanged between scenarios. Otherwise the difference can reflect several changes at once. A loan comparison that includes new fees or a different term should identify those separately.

What this changes on RealEstateCalc

The cash rate is market context. It does not change the mortgage amortisation formula or become a universal home loan rate. No calculator formula change follows from this decision alone.

The Borrowing Power Calculator is a separate indicative model. A repayment increase is not enough information to determine how a lender will assess an application. Income, expenses, debts and lender assumptions still matter.

What remains uncertain

This article does not verify any lender's pricing response, notice date or repayment amount. It does not predict the next RBA decision, property prices or rental changes. Use a lender notice for the contractual payment and a calculator for clearly labelled scenarios.

Sources and date checked

• RBA: Monetary Policy Decision, 29 September 2026, announcement checked 1 October 2026.
• RBA: Cash Rate Target, effective date checked 1 October 2026.
• ASIC Moneysmart: Mortgage calculator, principal-and-interest modelling reference checked 1 October 2026. The table above is original illustrative arithmetic.

General information and indicative estimates only. This is not financial, legal, tax or credit advice, a lender quote, approval, valuation or investment recommendation. Actual repayments depend on the contract, timing, fees and personal circumstances. Confirm the lender's notice and seek licensed advice where needed.

Last updated: 1 October 2026.

Editorial illustration: a conceptual image, not a photograph or market chart.