RBA cash rate updates

Whether you’re saving for your first home, next home or an investment property, or managing an existing mortgage, RBA cash rate decisions impact your borrowing capacity and mortgage repayments. We’re here to help you understand how the cash rate affects your budget and keep your property goals on track.

RBA cash rate updates

The latest cash rate

RBA UPDATE

The RBA holds the cash rate at:

4.35%

The cash rate held steady, but there may still be room to reduce your repayments.

How an RBA cash rate change can affect mortgage repayments

When the RBA moves the cash rate, lenders typically pass these changes to interest rates on variable home loan products, which can impact your mortgage repayments.

According to The Brokers’ Bible, a platform owned by the Loan Market Group and designed to help mortgage brokers quickly navigate complex lender policies, major lenders typically implement interest rate changes within a consistent 10–14 day repricing cycle, with faster adjustments generally attributed to technological and operational agility rather than specific lender generosity.

Here’s how a rate increase of .25 percentage points could impact mortgage repayments

Total home loan balance	Estimated monthly repayment at 6.00% p.a.	Estimated monthly repayment at 6.25% p.a.	Potential monthly repayment increase
$500,000	$2,998	$3,079	$81
$750,000	$4,497	$4,618	$121
$1,000,000	$5,996	$6,157	$161

Note: These figures are basic calculations for illustrative purposes over a 30 year loan term, paying principal and interest. Your actual repayments could vary based on your specific financial situation.

How an RBA cash rate change can affect borrowing capacity

When the RBA changes the cash rate, lenders generally change their interest rates attached to home loans, particularly variable rate products, in line with the cash rate move. This interest rate is then applied when they calculate your borrowing capacity, generally increasing your borrowing capacity if it decreases (meaning you may be able to borrow more) or lowering it if the cash rate increases (meaning you may not be able to borrow as much).

Every lender uses different criteria to calculate income and living expenses, and therefore borrowing capacity. Loan Market brokers can compare your unique situation across a panel of over 60 residential lenders to find one that calculates your borrowing power more favourably, helping you stay on track with your property goals.

Explore your loan options

Borrowing power calculator

Find out how much you may be able to borrow to purchase property.

Extra mortgage repayments calculator

How much could you save by making additional repayments toward your mortgage?

Home loan comparison calculator

No two loans are the same and there are a number of costs to weigh up. Compare two side by side to see the difference.

Explore your loan options

Borrowing power calculator

Find out how much you may be able to borrow to purchase property.

Extra mortgage repayments calculator

How much could you save by making additional repayments toward your mortgage?

Stamp duty calculator

Stamp duty varies depending on the value of the property, where you are buying, whether it is your first home and if you plan on living there. Calculate how much it might cost you.

FAQs.

Quick answers about the RBA cash rate.

How do I check I’m on the right loan deal for me when there is a change to the RBA cash rate?

When the RBA changes rates, it’s a good time to review your home loan. Your Loan Market broker can compare your current deal against a panel of over 60 residential lenders to see if there’s a more competitive option. Simply make an appointment with your Loan Market broker to check.

Does a split loan strategy protect my budget if the RBA changes direction?

A split loan lets you lock in a portion of your debt with a fixed rate, giving you repayment certainty while keeping the remainder on a variable rate for flexibility. This mix can help shield your budget from sudden RBA cash rate shifts while still allowing you to access features like offset accounts, essentially giving you the best of both worlds.

Can an offset account lower monthly interest charges to reduce the impact of rate hikes?

Yes. An offset account reduces your interest costs as you only pay interest on the loan balance minus the amount in the attached offset account. For example, if you have a $600,000 mortgage and $50,000 in your offset, interest is calculated on $550,000. This strategy can significantly reduce your interest bill and help you pay off your loan sooner. Keep in mind some offset accounts have fees attached so it is a good idea to discuss this strategy with your broker to see if it is right for you.

Should I fix my loan to reduce the impact of cash rate changes?

A fixed interest rate will not fluctuate when there are cash rate changes, giving you certainty in your repayments. This can be beneficial if the cash rate increases, but it can also mean you miss out on potential reductions if the cash rate is decreased. The choice to fix or not comes down to your preference, risk tolerance and strategy. Your broker can discuss your options to find the right one for you.