Broadly speaking, Australian interest rates fall in times of economic crisis, low inflation and high unemployment. Rates rise, sometimes very fast, when the economy is booming or inflation is surging.
Since 2022, the RBA has gone the other way, lifting rates quickly to fight inflation. As of November 2025, the official cash rate sits at 3.60%, according to the Reserve Bank of Australia, marking a steadier phase after one of the fastest tightening cycles in decades.
The major driver of interest rates is the official cash rate target set by the Reserve Bank of Australia (RBA).
When the cash rate falls, interest rates on home loans and savings accounts fall. This is good news for borrowers but bad news for savers earning interest in their savings accounts.
After sitting near zero during the pandemic, both savings and lending rates began to climb sharply from mid-2022 as the RBA raised the cash rate to curb inflation.
As of November 2025, the RBA cash rate is 3.60%, while the average bonus savings rate is about 4.0%, with major banks offering between 4.3% and 4.8%. The gap between the two remains consistent, showing how banks adjust savings returns in line with monetary policy.
The graph above shows how savings rates from the Big Four banks have moved as the RBA raised the cash rate. (ANZ, CBA, NAB and Westpac)
Savings account rates climbed sharply through 2022 and 2023 as the RBA lifted rates to curb inflation. By mid-2024, most big banks’ bonus savings rates peaked near 5%. Since then, some have eased slightly, reflecting lower cash rate expectations.
While savings rates continue to track the cash rate closely, banks have often been slower to pass on rate increases in full. As of November 2025, the average bonus rate among the Big Four sits between 4.3% and 4.8%, compared with the current 3.60% cash rate.
Home loan rates have shifted dramatically over time. From 1959 to 1990, the standard variable rate climbed steadily, peaking at around 17% in 1990.
After the early 1990s, rates trended lower for decades, dropping sharply after the Global Financial Crisis and again during the COVID-19 pandemic, when some borrowers paid under 2%.
Rates started rising again in 2022 as the RBA tightened policy. By late 2023, average variable home loan rates had climbed above 6%, and as of November 2025, discounted owner-occupier rates sit around 6.2%, while 3-year fixed rates average about 5.8%.
The cash rate reached 17.50% in early 1990 as the RBA fought high inflation. Mortgage repayments became extremely expensive, but the peak was short-lived.
By July 1993, the cash rate had fallen to 4.75% as the economy recovered from recession. Inflation was under control, though growth remained modest.
During the GFC, the RBA slashed the cash rate from 7.25% to 3.00% by early 2009 to support the economy amid global turmoil.
Rates stayed low for years after the GFC, before hitting a record low of 0.10% in 2021 to counter the economic shock of COVID-19. This period also saw a surge in property prices.
As inflation surged from supply shortages, post-COVID demand, and global conflicts, the RBA lifted rates rapidly — from 0.10% in May 2022 to 4.35% by late 2023, one of its fastest tightening cycles ever. The pace slowed through 2024, and by November 2025, the cash rate settled at 3.60%.
Starting in May 2022, the RBA began one of its fastest tightening cycles in history, lifting the cash rate from 0.10% to 4.35% by late 2023. The pace of hikes slowed through 2024 as inflation started easing, and by November 2025, the cash rate sat at 3.60%.
The graph below shows the average bonus savings rate across Australian savings accounts each year.
| Year | Average bonus savings rate |
|---|---|
| 2002 | 2.9 |
| 2003 | 2.94 |
| 2004 | 3 |
| 2005 | 3.4 |
| 2006 | 4.03 |
| 2007 | 4.6 |
| 2008 | 5 |
| 2009 | 2.39 |
| 2010 | 3.94 |
| 2011 | 5.11 |
| 2012 | 4.96 |
| 2013 | 4.27 |
| 2014 | 3.77 |
| 2015 | 2.88 |
| 2016 | 2.33 |
| 2017 | 1.92 |
| 2018 | 2.08 |
| 2019 | 1.89 |
| 2020 | 1.01 |
| 2021 | 0.35 |
| 2022 | 1.37 |
| 2023 | 4.45 |
| 2024 | 4.86 |
| 2025 | 4.36 |
Source: RBA
The RBA plays a major role in overseeing Australia's monetary policy. This includes setting the cash rate target. This is a benchmark rate that determines the costs major banks incur when borrowing money from each other in the short term.
The cash rate has a major impact on the rates banks and lenders set for:
The cash rate is a policy tool that allows the RBA to influence the economy. Generally speaking:
Banks and lenders adjust their interest rates on home loans and savings accounts because of many factors. The cash rate is a major one, but there are many others.
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do you have historical monthly interest rate data for the Westpac (unsecured) Business Overdraft Rate?
Hi John, No, we don’t track individual bank interest rates.