RBA Raises Rates to 4.60%: What It Means For Your Mortgage
The Reserve Bank of Australia (RBA) has lifted the cash rate again. At its meeting on 29 September, the Board decided to raise the cash rate target by 25 basis points to 4.60%, the third increase this year. The decision was unanimous, and it follows weeks of signals from Governor Michele Bullock and market pricing that pointed to exactly this outcome.
As mortgage brokers, we spend a lot of time reading between the lines of what the RBA says. And this update is worth paying attention to.
What's actually going on
In its official statement, the Board pointed to the same pressures Bullock had flagged earlier: the Middle East conflict pushing global oil and energy prices higher, and AI-related demand driving up prices for technology goods. Recent inflation data also came in stronger than expected at the previous meeting, and the Board judged that a further tightening in financial conditions was needed to bring inflation back to target.
The RBA cash rate has now been lifted three times in 2026, and sits at 4.60% following this latest 25 basis point increase. Another increase would add more pressure to household budgets that are already stretched by cost-of-living increases, tighter borrowing capacity, and a revised federal budget.
Why this matters if you've got a mortgage
Mortgage rates across Australia have moved higher again, and if you're on a variable rate, this hike means higher repayments are already on their way. If you're coming off a fixed rate soon, the gap between what you were paying and what you'll pay on the revert rate could be bigger than you're expecting. And if you're planning to buy, your borrowing power may be tighter than it was a few months ago.
We're already seeing some clients start to feel the pinch, and it's pushing a few to consider downsizing or selling investment properties rather than stretching their budget further. That's a completely understandable response, but it's not the only option.
What we'd suggest doing now
This isn't the time to sit on your hands and hope for the best. A few practical steps:
- Check your current rate. If you haven't reviewed your loan in the last 12 months, there's a good chance you're paying more than you need to. Our loan health check is a good place to start.
- Know your borrowing capacity before you shop. Rate changes affect how much you can borrow, not just what you repay. Our borrowing capacity calculator gives you a realistic picture.
- If you're coming off a fixed rate, plan ahead. Don't wait until the last minute. Check our fixed rate expiry page for timing tips.
Ready to make your move?
With 20 years of experience helping clients right across Australia, KM Financial Services can give you tailored advice on your buying strategy. If you want to take it a step further, call us on 0402 879 531 or book a free consultation today. KM Financial Services is here to guide you and help you secure the right position in the market, whatever the RBA decides next.
20 Years of Experience | 400+ RateMyAgent Reviews | 400+ Google Reviews | Australia-Wide Support
Follow us on Instagram and LinkedIn for more updates like this.
