The decision is in: 4.60%
On 29 September 2026, the RBA announced a 25-basis-point increase in the cash rate target, from 4.35% to 4.60%. The change takes effect on 30 September 2026. This is the fourth increase this year and the highest level since 2011. RBA rate history.
The Board’s decision was unanimous. It pointed to persistent inflation, energy-related pressures and domestic capacity constraints, and left further tightening open if needed. That is a conditional position, not a promise of another increase at a particular meeting. Read the official decision.
The RBA target is a benchmark for the financial system. Your lender sets your home-loan rate and the date any change applies. A 4.60% cash rate does not mean your mortgage will be priced at 4.60%.
Yes—the outcome matched the outlook we shared
In our earlier pre-decision outlook, we highlighted the prospect of a 0.25 percentage-point rise to 4.60%, citing CBA economists’ forecast. That is the outcome announced today.
It is useful to have prepared for the right scenario. But one correct outlook does not make future decisions certain. The next step for our clients is to understand their own repayment exposure and choose a manageable response.
Capital Connections’ take: use the announcement as a reason to review your numbers. Avoid making a rushed refinancing, fixed-rate or property-purchase decision based on a headline alone.
Open to further hikes: how should you prepare?
A sensible budget should allow for more than today’s change. Test your actual mortgage at the new rate your lender announces, and then at another 0.25 or 0.50 percentage points higher. Those additional rates are planning scenarios—not predictions.
Check what would remain after mortgage payments, groceries, transport, childcare, insurance and family commitments. If your budget only works on the assumption that rates will soon fall, discuss that pressure before taking on more debt.
Your confirmed position
Use your actual balance, remaining term and lender’s written rate notice.
A higher-rate scenario
See whether a further increase would leave enough money for everyday costs.
A practical response
Review pricing, spending and loan features while retaining a cash buffer.
How much more could you pay each month?
If a lender passes on the full 0.25 percentage-point rise, an illustrative rate of 5.95% would become 6.20% p.a. Here is what that could mean for principal-and-interest repayments.
| Loan balance | 5.95% p.a. | 6.20% p.a. | Monthly increase |
|---|---|---|---|
| $400,000 | $2,385 | $2,450 | +$65 |
| $600,000 | $3,578 | $3,675 | +$97 |
| $800,000 | $4,771 | $4,900 | +$129 |
| $1,000,000 | $5,963 | $6,125 | +$161 |
Assumptions: 30 years remaining, monthly principal-and-interest repayments, no fees, offset or extra payments, and a constant rate in each scenario. Standard monthly amortisation formula; figures rounded to the nearest dollar and differences calculated before rounding. These rates are examples, not lender offers or confirmed lender announcements. Your remaining term and product will affect the result.
For a $600,000 balance, the illustrated increase is approximately $97 per month. Use your remaining term rather than resetting your calculation to 30 years.
Compare your repayments →How the decision could affect your situation
Variable-rate homeowners
Your repayment may increase if your lender raises your product’s rate. Confirm the amount and effective date, and check how your direct debit is managed. If you already pay above the minimum, find out whether that covers the change rather than assuming it does.
Fixed-rate borrowers
A cash-rate rise generally does not alter the contracted rate on the fixed portion during its fixed period. The more immediate question is what happens when that period ends. Check your expiry date, likely revert rate and any break costs before switching early.
First home buyers and people with pre-approval
A higher assessment rate can reduce borrowing capacity, depending on lender policy and your circumstances. Reconfirm your finance position before making an unconditional commitment. Keep purchase costs and a post-settlement buffer separate from your deposit.
Property investors
Recheck cash flow after interest, vacancy, insurance, repairs, strata and management expenses. Do not assume rent will rise enough to cover a higher repayment. Seek qualified tax advice for tax-specific questions.
Self-employed households
Look at both business and household cash flow. A repayment that works in a strong trading month may be harder during a quieter period. Bring recent financial information to a loan review.
Should you refinance, fix or stay with your lender?
Start with a pricing review from your existing lender. Then compare alternatives using the same loan balance and remaining term. Assess the total cost, loan features and approval requirements—not just the advertised interest rate.
Refinancing can involve discharge, application, valuation and other costs, including break costs or lenders mortgage insurance where applicable. A lower monthly payment achieved by extending the term may increase interest over the life of the loan. Moneysmart’s refinancing guidance.
“After switching costs, and keeping my remaining term the same, how does this option compare—and what features or flexibility would I give up?”
Fixing may offer repayment certainty during the fixed period. Variable and split loans offer different trade-offs. Extra-payment limits, offset availability and early-exit costs matter. There is no single structure that suits every borrower.
Five things to do before changing your loan
Find your latest statement
Note your rate, outstanding balance, remaining term, repayment and any fees.
Check your lender’s notice
Confirm whether your loan is affected and when the new rate and payment apply.
Update your budget
Include irregular bills and a realistic buffer. Test another increase as a contingency.
Compare on consistent terms
Review costs, features and repayment duration together. Avoid focusing only on the smallest monthly figure.
Discuss your next step
Ask for a clear explanation of the options before applying for a new loan or changing your structure.
Need a consultation? Let’s review your numbers
You do not need to have every answer before speaking with us. Capital Connections Finance can help you understand how a rate change may affect your home loan and compare potential next steps based on your circumstances.
Bring these details
Your balance, current rate, remaining term, repayment, loan features and any fixed-rate expiry date.
Tell us your goal
Managing cash flow, reviewing pricing, buying a first home or planning an investment.
Ask for clarity
Discuss costs, repayment changes and the trade-offs of staying, refinancing or changing structure.
Our team supports borrowers in Adelaide, Melbourne, Sydney, Brisbane, Perth, Canberra, Hobart and Darwin, including the Nepali community. You can discuss your home-loan questions in Nepali or English. These are service areas, not a list of branch locations.
Book your loan consultation →Already finding repayments difficult?
Contact your lender’s hardship team early, ideally before missing a payment. Explain your circumstances and ask what assistance may be available. Do not wait for a refinancing application or the next RBA meeting to seek support.
A broker consultation does not replace hardship assistance. Free financial counselling is available through the National Debt Helpline on 1800 007 007. See Moneysmart’s mortgage hardship guidance.
Frequently asked questions
When does the 4.60% cash rate take effect?
The new RBA cash rate target takes effect on 30 September 2026. Your lender’s home-loan rate and repayment effective dates may differ.
Does this mean another rate rise is guaranteed?
No. Further increases remain conditional. Future decisions depend on economic information and the RBA’s assessment of the outlook.
Will my mortgage rate become 4.60%?
No. The RBA cash rate is not a retail mortgage rate. Your loan is priced by your lender under your product terms.
Did Capital Connections predict the exact outcome?
Our earlier article highlighted a 25-basis-point rise to 4.60%, citing CBA economists’ forecast. Today’s result matched that outlook; it does not establish certainty about future decisions.
Can a consultation guarantee a lower rate?
No. Any options depend on your circumstances, eligibility, lender pricing and credit assessment. A review can help you compare costs and understand the available choices.
Your loan deserves more than a headline.
Talk with Capital Connections Finance about your repayments, loan structure and the next step that fits your situation.
Book a time to talk →Sources and important information
Published 29 September 2026 after the RBA decision. This article reflects the decision statement; it does not report on the later media conference or claim that lenders have already changed their mortgage rates.
- RBA decision, 29 September 2026
- RBA cash rate history and effective date
- Capital Connections pre-decision outlook
- Moneysmart: switching home loans
- Moneysmart: mortgage hardship
General information only, without considering your personal objectives, financial situation or needs. Figures are estimates, not quotes. Loan eligibility and approval are subject to lender assessment and terms. Rates and lender responses can change. This article is not a live rate feed.