Where's the cash rate needle sitting?
The Reserve Bank lifted the cash rate on Tuesday 29 September, just as every major bank had predicted. Here's what happened, what it means for a mortgage, and what's expected on Melbourne Cup Day.
The board voted unanimously for the 25bp rise, and all four major banks passed it on to variable-rate borrowers in full. Next decision: Tuesday 3 November.
Market Watch
What happened on 29 September
The RBA's Monetary Policy Board raised the cash rate by 25 basis points to 4.60% — its fourth rise of 2026 and the highest cash rate since November 2011. The decision was unanimous. In its statement the Board said "inflation remains elevated" and that upside risks it flagged in August were materialising: global energy prices are much higher than assumed in its August forecasts as Middle East supply disruption continues, and recent Australian inflation came in stronger than expected.
The Board also noted the slowdown is real — housing prices have fallen in most capital cities, new housing loans have declined noticeably, consumer spending growth is easing and the labour market has eased broadly as expected. But it kept the door open, saying it will do what it considers necessary to bring inflation back to target, "including increasing the cash rate target further if needed."
The consensus had flipped in the weeks before: Brent crude pushed above US$100 a barrel, July CPI and Q2 GDP both printed stronger than the RBA expected, and Governor Michele Bullock had told a parliamentary committee that upside risks to inflation appeared to be materialising. CBA Economics had called it a near-unanimous decision while flagging the case to hold was "not one sided".
How the big four's calls going into the meeting played out:
Next Meeting
Looking ahead: Tuesday 3 November
The Board meets 2–3 November and announces its decision on Melbourne Cup Day, alongside the RBA's updated quarterly economic forecasts. The question now is whether a fifth hike takes the cash rate to 4.85% before Christmas.
Says a November hike is now Westpac's base case unless the Middle East conflict is resolved for good beforehand — and that the bar for any further rises after that is much higher, given the rises already delivered and an easing labour market.
Didn't commit either way on November. Said the Board "did not take this decision lightly", acknowledged that rate rises hurt borrowers, and pointed to how the four rises this year feed through the economy as what matters most.
Betashares' David Bassanese called the RBA a short-priced favourite to hike again on Melbourne Cup Day; HSBC's Paul Bloxham expects a further rise in the December quarter, most likely November; Chartered Accountants ANZ's Richard Holden said bond markets are pricing more rises, the first possibly in November.
What to watch before then: oil and energy prices and any resolution in the Middle East (the swing factor Westpac singles out), the next inflation figures from the ABS, and signs that higher rates are slowing spending and housing faster than the RBA expects. For a typical $550,000 variable loan, another 0.25% would add roughly $90 a month — use the calculator below for your own numbers.
Independent Voices
Beyond the big four
Views from independent economists, research houses and academics gathered in the lead-up to the 29 September decision. They broadly agreed with the banks on direction — though not always on how far, or what it costs the economy.
Reinstated her forecast for one final RBA hike after stronger inflation data, calling the decision "finely balanced." National dwelling prices fell 0.9% in August — a fifth straight monthly decline — and William Buck now expects prices to fall 5% for 2026 overall, with rate cuts from mid-2027.
Put the odds of a September move at 70% versus November, noting the earlier hikes were already "starting to slow" housing, consumer sentiment and business conditions — "just not slow enough yet for the RBA." AMP saw the cash rate peaking at 4.60%, with cuts possible in the second half of 2027.
Told The Australian in September that the RBA would probably hike again before long, perhaps that month — an independent read that lined up with the shift in bond markets weeks before the banks moved.
Argued inflation expectations remain broadly anchored, and that it would likely take clearly negative economic news — not just a sticky quarterly print — to shift the RBA back toward cutting in 2026.
The most bearish voice in the mix: with sentiment already this negative, he argued a September hike — and especially a follow-up in November — was "very likely" to tip the economy into recession.
Your Repayments
The impact — what a move does to repayments
Monthly principal & interest repayment on a 30-year loan, shown against a representative variable rate (now including the 29 September rise) — adjust it below to match a real scenario.
| Loan amount | −0.50% | −0.25% | At current rate | +0.25% | +0.50% |
|---|
Table amounts and shading update automatically if you change the current rate or term above. Your custom loan amount is highlighted as its own row.
Reality Check
Does a pay rise actually keep up?
A rate rise doesn't just cost more per month — it changes how much of every dollar in repayments goes to interest versus paying down the loan. This works out the pay rise needed to cover that extra interest over the next 12 months, properly accounting for the fact that the balance keeps shrinking either way.
Next Steps
Things to consider
- 01
Negotiate with your bank first
Existing customers are often quietly paying more than new customers get offered. A broker can do this on your behalf — the call alone can be the cheapest rate cut available.
Speak to a broker - 02
Get a full loan review
Not just the rate — the structure, offset usage, fixed/variable split and whether refinancing costs are worth it given where the cycle is headed.
Speak to a broker - 03
Check where the money's actually going
Run your real numbers through a budgeting tool before assuming a rate rise is unaffordable — often it's something else that's moved.
Try the budget analyser - 04
Look honestly at income, not just rates
If wage growth (3.2%) is already trailing inflation (3.5–3.6%), a rate rise on top is a real cut in what's left over — worth knowing before it shows up as missed repayments.
Sources: RBA, "Statement by the Monetary Policy Board: Monetary Policy Decision" (29 Sep 2026), cash rate target & board meeting schedule (rba.gov.au); Westpac Economics, "RBA hikes, retains hawkish language" (Luci Ellis, 29 Sep 2026); ABC News live coverage of the decision and press conference (29 Sep 2026); Mortgage Professional Australia (1 Oct 2026); CBA Global Economic and Markets Research, "RBA to hike in September, risk sits with still higher rates" (21 Sep 2026); NAB Economics, "Monetary Policy Update" (27 Aug 2026); Westpac and ANZ economics teams via Aussie, Canstar and Mortgage Professional Australia reporting (Sep 2026); William Buck, "Housing downturn deepens as weakness spreads" (Besa Deda, 1 Sep 2026); AMP economic commentary (My Bui, Livewire Markets, Sep 2026); Capital Economics via The Australian; Prof. James Morley, University of Sydney, via Finder economist survey; Alan Kohler via The Nightly. ABS Wage Price Index, June quarter 2026 (released 19 Aug 2026); ABS Consumer Price Index, July 2026 (released 26 Aug 2026). Repayment and salary calculations are simplified estimates for illustration only, use standard principal & interest amortisation, and are not financial advice — actual lender rates, fees and eligibility vary. Updated 2 October 2026 after the 29 September decision; forecasts can and do change before the next meeting.