RBA cash rate increases, but here’s the good news
One year on from rates beginning to fall, the RBA has increased them again.
2026 is off to a disappointing start for homeowners, as the RBA announces an interest rate hike for its first meeting back of the year.
The cash rate now sits at 3.85%.
Borrowers can expect their variable home loan interest rates to follow suit, meaning repayments will go up and add more pressure to struggling households.
Worried about your interest rate?
Keep an eye on our interest rate tracker to see if your lender is changing their rates.
How this rate rise will affect borrowers
It's hard to put a blanket number down for how a rate rise might affect borrowers, because everyone's home loan is so different. But let's look at one example:
Let's say you took out a $700,000 home loan 5 years ago and you've got about $633,000 left to repay. Your rate is changing from 5.20% to 5.45%.
Your monthly repayments would increase by about $98 a month.
You can use our rate change calculator to see how much your repayments could change by.
What happens next?
The panel of economists that Finder surveys each month was very divided on whether this month would be a rate hike or a pause, so it's even harder to know what will happen for the rest of the year.
The hope is that this month's rate increase will help bring inflation back down to the target range of 2% to 3%. It's currently at 3.8%.
But it can take a few months for the effect of an RBA rate change to be felt, so it's unlikely we'll see rates go back down again soon.
So what's the good news?
The average homeowner could save $143 just by refinancing their home loan regardless of a rate change*.
If you haven't looked around at other home loans in the last 2 years it's possible you're paying higher than you could be. So you might be able to give yourself your own rate cut just by comparing and switching.
Rising rates should especially be cause for borrowers to take a look around at other home loan products. This means lenders may start getting more competitive with their rates in a bid to lure customers to them.
Ready to compare?
Take a look at other home loan rates on the market to make sure you're not overpaying.
* Using the ABS average home loan size, the RBA's average home loan interest rate, and the lowest variable owner occupier interest rate in Finder's database.
Sources
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