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 second rate increase since November 2023, following a 0.25% hike at the February 2026 meeting that lifted the rate from 3.60% to 3.85%. The hiking cycle has reversed the three rate cuts delivered during 2025 (February, May and August), which had taken the cash rate down to 3.60%.

Why Did the RBA Raise Rates?

The Board cited stronger-than-expected economic growth over the second half of 2025, a labour market that had tightened further, and underlying inflation that remained elevated. Data suggested slightly more excess demand in the economy than the Board had previously expected, with inflationary pressures somewhat greater than forecast at the February meeting.

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. Under APRA's rules, lenders assess new borrowers at an interest rate at least 3 percentage points above the loan product rate — not the cash rate. With typical variable home loan rates now sitting around 6-6.5% after the March rise, that puts the serviceability assessment rate at approximately 9-9.5% for new borrowers. Borrowing capacity is significantly lower than it was in late 2025 when rates were at their cycle lows.

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.