The Reserve Bank of Australia (RBA) today raised the official cash rate by 0.25 percentage points, from 4.35% to 4.60%. It’s the fourth increase this year and takes the cash rate to its highest level since 2011. The Board’s decision was unanimous, and it signalled that inflation is still too high and that it will keep a close eye on the data before its next meeting.
What it costs the average home loan
The average new owner-occupier home loan in Australia is about $731,000 (ABS Lending Indicators, June quarter 2026). Assuming your lender passes on the full 0.25% and your loan is principal and interest over 30 years, moving from an average variable rate of 6.24% to 6.49% means:
| Loan amount | At 6.24% | At 6.49% | Extra / month | Extra / year |
|---|---|---|---|---|
| $500,000 | $3,075 | $3,157 | $82 | $981 |
| $731,000National average | $4,496 | $4,616 | $119 | $1,434 |
| $842,000NSW average | $5,179 | $5,316 | $138 | $1,651 |
| $1,000,000 | $6,151 | $6,314 | $163 | $1,961 |
| $1,500,000 | $9,226 | $9,471 | $245 | $2,942 |
Monthly principal and interest repayments, 30-year term, assuming the full 0.25% increase is passed on. Figures are rounded estimates only.
Looked at over the whole year, the picture is starker. The cash rate has risen a full 1.00% since January (from 3.60%), which adds roughly $470 a month to the repayments on a $731,000 loan, or around $540 a month on the NSW average of $842,000. With Northern Beaches loans often well above the state average, many local households are feeling more than that.
Property investors
On an interest-only investment loan, every 0.25% rise costs about $104 a month for each $500,000 borrowed. Interest on a loan used to buy an income-producing property is generally tax deductible, which softens the after-tax cost, but it doesn’t change the cash-flow hit. Now is a good time to check that your rental income, deductions and any PAYG withholding variation still line up with your real numbers.
Small businesses and sole traders
Higher rates flow through to business overdrafts, equipment finance and variable business loans, and they squeeze customers’ spending at the same time. A few practical steps worth taking this quarter:
- Refresh your cash-flow forecast with the new rate built in, and stress-test it for another 0.25% rise.
- Review your debt structure. Separate deductible business or investment debt from non-deductible home debt, and pay down the non-deductible debt first where you can.
- Talk to your lender or broker. Many borrowers are paying more than they need to; asking for a rate review or refinancing can often offset part of today’s rise.
- Tighten debtor collections and look at your pricing before costs erode your margin.
What happens next?
The September-quarter inflation figures are released tomorrow (30 September), and several major banks are already forecasting another increase at the RBA’s next meeting on 3 November. If that happens, the cash rate would reach 4.85%, adding roughly another $120 a month to an average loan.
How we can help
Rate rises are when a clear plan matters most. Our Strategic Advisors can model the impact on your household or business cash flow, review your debt structure and help you plan for what’s ahead. Book a call with the Trinity Partners team to get started.
Calculations assume a 30-year principal and interest loan, an average owner-occupier variable rate of 6.24% before today’s decision and full pass-through of the 0.25% increase. Your lender’s rate, loan balance and remaining term will change the figures. This article is general information only and does not take into account your personal circumstances. It is not financial or credit advice.
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