The Reserve Bank of Australia (RBA) has lifted the cash rate by 0.25 percentage points to 4.60%, the fourth increase of 2026. This September 2026 rate rise follows three rises earlier in the year and two meetings where the RBA held steady. If you have a variable home loan, are coming off a fixed rate or are planning to buy in the Sutherland Shire, here is what the change means and what you can do about it.
What the RBA Decided in September 2026
At its meeting ending 29 September 2026, the RBA board raised the cash rate target from 4.35% to 4.60%. The cash rate began the year at 3.60% and rose in February, March and May, before the RBA paused in June and August. You can see the full history on the RBA cash rate page.
The cash rate is not the rate you pay on your mortgage. However, most lenders price their variable home loans off it, so a rise usually flows through to borrowers. Each lender decides whether to pass on the change, by how much and from when, and it will tell you in writing before your repayments change.
Why the RBA Raised Rates
The RBA said inflation remains too high and some of the risks it flagged in August have started to play out. Global energy prices have climbed further because of the broadening conflict in the Middle East, higher fuel costs are flowing through to other prices, and recent inflation figures in Australia were stronger than expected. The board’s decision was unanimous. It also noted that housing prices have fallen in most capital cities and new home lending has declined noticeably. You can read the full RBA statement.
How Much the September 2026 Rate Rise Could Add to Repayments
As a rough guide, a 0.25% rise adds about $16 to $17 a month for every $100,000 you owe on a 30-year principal and interest loan. That holds across the variable rates most borrowers are paying today.
| Loan amount | Extra each month (approx.) |
|---|---|
| $400,000 | $65 |
| $600,000 | $100 |
| $800,000 | $130 |
| $1,000,000 | $165 |
For your own numbers, try our loan repayment calculator. Interest-only borrowers will feel the change a little differently, because their whole repayment is interest.
If Your Fixed Rate Is Ending Soon
Borrowers rolling off a fixed rate are usually hit hardest. Many fixed their loans when rates were lower, so the jump to a variable rate can be large. The best time to act is around 90 days before your fixed term ends, because that gives you time to compare lenders and, if it makes sense, refinance. Our guide to your options when a fixed rate ends walks through each choice.
Wondering whether to fix again? We compare the two approaches in fixed vs variable: should I fix my home loan in 2026? Fixed rates reflect where lenders expect rates to go, so they don’t always move in step with the cash rate.
What It Means If You Are Buying
Higher rates also reduce borrowing capacity, because lenders test whether you could still afford the loan at a rate above the one you would pay. As a result, even a small rise can trim what a lender will offer. If you already have pre-approval, check that it still covers your budget before you bid at auction. Our borrowing power calculator gives a quick estimate, and we explain the wider picture in why your borrowing capacity may have reduced.
Six Practical Steps After the Rate Rise
- Read your lender’s notice. It will confirm your new rate and repayment, and the date it starts.
- Ask your lender for a better rate. Existing customers often pay more than new ones, and a simple request can sometimes secure a discount.
- Make the most of your offset account. Every dollar in an offset reduces the interest you pay. See our guide to offset versus redraw.
- Compare your options. Refinancing can make sense if the savings outweigh the costs. Our refinancing page explains how it works, and Moneysmart has a useful checklist.
- Review your budget early. Small changes now are easier than catching up later.
- Speak up early if you are struggling. Lenders have hardship teams that can help. Our financial difficulty and hardship hub explains your options.
How Ingram Financial Can Help
We’re a local mortgage broker based in Bangor, working with borrowers across the Sutherland Shire and right around Australia by phone and video. We review every client’s loan each year, and after a rate rise we can check how your rate compares with the rest of our lender panel. If there’s a better option, we’ll show you the numbers, including any switching costs. If staying put is the right call, we’ll tell you that too.
September 2026 Rate Rise FAQs
It depends on your lender. Each lender sets its own timing and must give you written notice before your repayments change. Check your lender’s notice or app for the exact date.
Not while the fixed term lasts. Your rate and repayments stay the same until the fixed period ends. After that, the loan usually rolls onto the lender’s variable rate unless you choose another option.
It can be worth it if another lender offers a sharper rate and the savings outweigh any costs. However, lenders reassess your finances when you refinance, so it pays to check your options early.
Nobody knows for certain. However, the RBA said it will do what it considers necessary to bring inflation back to target, including raising the cash rate further if needed. It will make each decision based on the latest data. Rather than trying to predict rates, it helps to make sure your loan structure suits you whichever way they move.
Published 29 September 2026. Repayment figures are illustrative estimates only and assume the full rate change is passed on to a 30-year principal and interest loan. The information on this page is general in nature and does not take into account your objectives, financial situation or needs. Lending criteria, fees and charges apply. Consider whether it is appropriate for you and speak to us for advice specific to your situation.
