RBA Raises Cash Rate to 4.10% in March 2026: What It Means for Property

Overview

On 17 March 2026, the Reserve Bank of Australia raised the official cash rate by 0.25 percentage points to 4.10%. The decision was made by a narrow 5-4 majority of the Monetary Policy Board, with four members voting to hold rates unchanged at 3.85%.

This is the first rate increase since November 2023. It follows an extended hold period at 4.35% and three rate cuts delivered in February, May, and August 2025.

Why Did the RBA Raise Rates?

The Board cited a material pickup in inflation during the second half of 2025. While inflation had fallen substantially from its 2022 peak, it re-accelerated in late 2025 due to greater-than-expected capacity pressures in the economy. The conflict in the Middle East also contributed to sharply higher fuel prices, adding to inflationary concerns.

Impact on Mortgage Holders

Most lenders are expected to pass the full 0.25% increase through to variable-rate mortgage holders. On a $500,000 variable loan over 30 years, this adds approximately $75-80 per month to repayments.

For borrowers who were already stretched by previous rate increases, this rise further tightens household budgets. Borrowers on fixed rates are unaffected until their fixed period expires.

Use our Mortgage Repayment Calculator to see exactly how the rate change affects your repayments.

Impact on Borrowing Power

Higher rates directly reduce the amount banks will lend. Lenders apply a stress test buffer (typically 3% above the offered rate), meaning the assessment rate is now approximately 7.1% for new borrowers. This significantly constrains borrowing capacity compared to early 2025 when rates were lower.

Check your current borrowing power with our Borrowing Power Calculator.

Impact on Property Prices

Despite the rate rise, most forecasters expect national property prices to continue rising in 2026, driven by persistent undersupply of housing and strong population growth. However, growth is expected to be more moderate and uneven across cities.

Perth and Brisbane are forecast to see the strongest growth, while Sydney and Melbourne may see more subdued performance due to affordability constraints at current price levels.

What Should Borrowers Do?

1. Review your rate — contact your lender to ensure you are on the best available rate
2. Model the impact — use our Extra Repayments Calculator to see how maintaining higher repayments when rates eventually fall can save years of interest
3. Consider fixing — if you want certainty, compare fixed and variable options with our Loan Comparison Calculator
4. Build a buffer — aim to stay at least 3 months ahead on repayments

What Comes Next?

The RBA's next scheduled meeting dates and decisions are published on the RBA website. Future rate decisions will depend on inflation data, employment figures, and global economic conditions.

Calculate your repayments: Mortgage Calculator | Check borrowing power: Borrowing Power Calculator.

Sources: RBA Media Release 17 March 2026 (mr-26-08), RBA Monetary Policy Decisions 2026.