Got a rate-rise letter? What it means and what to check

Checked 5 October 2026. General information only. No interest rate for any loan product is quoted in this article. The only rate mentioned is the Reserve Bank’s cash rate.

The short answer: On 29 September 2026 the Reserve Bank raised the cash rate by 0.25 percentage points to 4.60% (RBA, 29 September 2026). The big four banks have said they will pass the full rise on to variable home loans from Friday 9 October, and Macquarie from Thursday 15 October. If you have a variable loan, your lender’s notice tells you your new rate, the date it starts and, usually, your new repayment. It’s worth reading closely, because it’s a good moment to check whether your loan still suits you. If repayments are already getting hard, talk to your lender early.

What the RBA decided

At its 29 September meeting, the Reserve Bank’s Monetary Policy Board raised the cash rate target from 4.35% to 4.60%. It said it would continue to do what it considers necessary to bring inflation back to target, “including increasing the cash rate target further if needed” (RBA media release, 29 September 2026).

The cash rate isn’t your home loan rate. It’s the rate for overnight loans between banks. Each lender decides for itself whether to change its own rates, by how much and from when.

When the big lenders are passing it on

Other lenders set their own timing. Your own notice is the one that counts.

What your notice should tell you

Lenders have to tell you when your variable rate changes, usually in writing by the day the change takes effect. Some announce it publicly first and confirm the details in your next statement. Look for:

1. Your new interest rate and the date it starts.
2. Your new minimum repayment, and the date of the first repayment at the new amount.
3. Whether your repayment changes automatically. Some lenders adjust it for you. With others, or if you’ve set up your own transfer, you may need to change it yourself. If your repayment stays the same while the rate goes up, more of each payment goes to interest and the loan can take longer to pay off.
4. Which of your loan splits it applies to. If you have a split loan, only the variable part changes now.

If anything in the notice is unclear, call your lender and ask them to explain it.

Five things worth checking this week

1. Your budget at the new repayment. Compare the new amount with what’s coming in and going out each month. It’s easier to adjust early than after a missed payment.
2. Your offset and redraw. Money in an offset account reduces the interest you’re charged. If you’re paying for a package with an offset, make sure you’re using it.
3. When any fixed rate ends. A fixed rate doesn’t change until the fixed period ends. If yours ends in the next 6 to 12 months, ask your lender now what rate it will roll onto. Breaking a fixed loan early can be expensive, so get a written break-cost estimate before deciding anything.
4. Whether your current lender will review your rate. You can ask. They don’t have to agree, but some will.
5. Whether switching would actually be worth it. Refinancing can help, but it has costs: discharge fees, government fees, possibly break costs, and lenders mortgage insurance if your equity is under 20%. Compare the total cost over the same remaining term, not just the headline rate. Resetting to a new 30-year term can lower repayments while adding years of interest. Read what it costs to refinance and what can stop a refinance.

When a Home Loan Health Check makes sense, and when it doesn’t

It can make sense if: your loan is variable and you haven’t reviewed it in a couple of years, your fixed rate ends soon, or your circumstances have changed (income, family, a renovation).

It may not be worth it if: you’re in a fixed period with high break costs, your balance is small or nearly paid off, or the costs of switching would outweigh any benefit over the time you expect to keep the loan. Sometimes the honest answer is to stay where you are, and we’ll tell you that.

If repayments are getting hard

Talk to your lender early, ideally before you miss a payment. Under the National Credit Code you can ask your lender for a hardship variation if you can’t keep up because of illness, job loss, reduced income or another change in circumstances. Lenders must consider your request and respond. Options can include reduced or paused repayments for a period or a longer loan term. They don’t have to agree, and interest may keep building, so ask exactly how any arrangement would work and what it costs over time.

Our financial hardship page explains how to raise it with your lender. If you’re in hardship, the conversation with your lender comes first, before any talk about a new loan.

Will rates go up again?

Nobody knows. The RBA’s next scheduled decision is due on Tuesday 3 November 2026, at the end of its 2–3 November meeting (RBA meeting schedule). The RBA has said it will raise the cash rate further “if needed”, but that is not a forecast. A sensible plan is to make sure your loan would still work if rates rose a little further, rather than to bet on a particular outcome.

How Click Financial can help

We’re licensed mortgage and finance brokers based in Bankstown. We can read through your lender’s notice with you, check where your loan sits, and compare options across our panel of 30+ lenders on total cost over the same remaining term, including the costs of switching. We must act in your best interests, and any lender decision is subject to its own credit assessment.

Most of our home loan clients pay us nothing. We’re usually paid a commission by the lender. If a fee applies, we’ll tell you in writing before we start. See our Credit Guide.

Request a call back for a no-obligation Home Loan Health Check, or call 02 8708 7240. A broker calls you, usually the same business day.

Frequently asked questions

Does the RBA rise change my home loan rate automatically?
No. The RBA sets the cash rate. Your lender decides whether and when to change your variable rate, and must tell you. The big four banks have said they will pass on the full 0.25 points from 9 October 2026 (Macquarie from 15 October).

My loan is fixed. Does this affect me?
Not until your fixed period ends. Check when that is and ask your lender what rate the loan will roll onto.

Do I have to do anything when I get the notice?
Read it, check your new repayment and whether it changes automatically, and update any manual transfer. If anything is unclear, ask your lender.

What if I can’t afford the new repayment?
Talk to your lender early and ask about a hardship variation under the National Credit Code. See our financial hardship page.

When is the next RBA decision?
Tuesday 3 November 2026, at the end of the RBA Monetary Policy Board’s 2–3 November meeting.

Sources

• Reserve Bank of Australia, Statement by the Monetary Policy Board: Monetary Policy Decision, 29 September 2026
• Reserve Bank of Australia, Monetary Policy Board meeting schedule (2–3 November 2026 meeting)
• Westpac, media release, 30 September 2026
• ANZ newsroom, ANZ changes variable home loan rates, 30 September 2026
• NAB, NAB announces home loan interest rate changes, 30 September 2026
• CBA newsroom, CBA interest rate decision, 30 September 2026
• Macquarie, Macquarie Bank’s response to the RBA interest rate decision, 29 September 2026

Written by the Click Financial team, licensed mortgage and finance brokers. General information only. It doesn’t consider your objectives, financial situation or needs. Lending criteria, fees and charges apply. Most of our home loan clients pay us nothing. We’re usually paid a commission by the lender. If a fee applies, we’ll tell you in writing before we start. Click Financial Services (A & M Group Pty Ltd), Australian Credit Licence 390820. MFAA member 320936. Read our Credit Guide.