How Much Could The Next Rate Rise Cost You?

Even a small rise in interest rates can make a noticeable difference to your mortgage.

Use our Interest Rate Rise Calculator to compare what you’re paying now with what you could pay if your home-loan rate increased by 0.25%, 0.50% or another amount.

You can also stress-test a larger increase to see how much room you have in your household budget.

RBA Rate Update

• Current RBA cash rate: 4.35%
• Next RBA decision: 29 September 2026

The Reserve Bank of Australia will announce its next cash-rate decision at 2:30pm AEST on 29 September 2026.

If the RBA increases the cash rate by 0.25 percentage points, it would move from 4.35% to 4.60%.

That does not automatically mean your mortgage rate will also rise by 0.25%. Your lender decides whether to change its home-loan rates, how much of the change to pass on and when the new rate takes effect.

If you want to see what a 0.25% rise could mean for you, select +0.25% in the calculator below.

Calculate Your Repayment After An Interest Rate Rise

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Which Interest Rate To Settle For?

Your Guide To Finding The Interest Rate That’s Your Best Match

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How Much Could A 0.25% Rate Rise Add To Your Mortgage?

The dollar impact of a rate rise depends on how much you still owe and how long is left on your mortgage.

For an illustration, Reserve Bank of Australia data for July 2026 shows an average interest rate of 6.19% p.a. for outstanding owner-occupier principal-and-interest housing loans.

If that rate increased by 0.25 percentage points to 6.44%, estimated repayments on a loan with 25 years remaining would look like this:

For someone with a $750,000 mortgage, for example, a 0.25-percentage-point increase would add about $116 a month, or approximately $1,395 a year, under these assumptions.

These figures are examples only. Use the calculator with your actual balance, remaining term and rate for an estimate that better reflects your mortgage.

How High Could Interest Rates Go In 2026?

The RBA cash rate is currently 4.35%, but major bank forecasts suggest it could finish 2026 at 4.60% or 4.85%.

All four major banks currently expect the RBA to increase the cash rate by 0.25 percentage points at its September meeting.

The current end-of-2026 forecasts from the major banks of Australia are:

• CBA: 4.60%
• Westpac: 4.60%
• NAB: 4.60%
• ANZ: 4.60%

ANZ currently expects an additional 0.25-percentage-point increase in November, while the other three major banks have 4.60% as their central end-of-year forecast.

These forecasts can change. The RBA does not pre-commit to a particular peak for the cash rate and makes each decision based on inflation, employment, economic activity and other incoming data.

Does A 0.25% RBA Rate Rise Mean My Mortgage Rate Goes Up 0.25%?

No, it does not.

The RBA sets Australia’s cash rate target. Your lender sets the interest rate charged on your mortgage.

After an RBA decision, a lender can:

• Pass on the full cash rate change
• Pass on only part of the change
• Make a different-sized rate change
• Change different home-loan products by different amounts
• Decide when the new rate will take effect

That is why the most useful number to put into this calculator is the new rate confirmed by your lender.

Before your lender makes an announcement, you can use the RBA change as a scenario to see what could happen. For example:

• Current mortgage rate: 6.19%
• Potential increase: 0.25%
• Rate to test: 6.44%

When Will My Mortgage Repayment Increase After An RBA Rate Rise?

Your repayment does not normally change the moment the RBA announces a rate rise.

First, your lender needs to decide whether it will change its home loan rates. The lender will generally tell affected customers:

• The new interest rate
• When the rate becomes effective
• Whether their required repayment will change
• When the new repayment starts

The timing can differ between lenders.

If you receive a rate-change notice, come back to the calculator and enter the confirmed new rate to estimate the effect on your repayments.

What If I Have A Fixed-Rate Home Loan?

If you have a fixed-rate home loan, an RBA increase generally does not immediately change the interest rate on the fixed portion of your mortgage during the fixed period.

However, the rate available when your fixed period expires may be different. If your fixed rate is ending soon, you may want to compare:

• Your existing fixed rate
• The variable revert rate
• New fixed-rate options
• Variable-rate options
• The repayment under each scenario

Do not assume that fixing again will automatically be the better choice simply because rates have been increasing. The right structure depends on your plans for the loan, the flexibility you need and how you intend to manage repayments.

What If My Mortgage Is Part Fixed And Part Variable?

If your mortgage is split between fixed and variable rates, an RBA-driven change in the lender rate would generally affect only the variable portion immediately.

For example, suppose you have:

Total mortgage: $800,000

• $500,000 fixed
• $300,000 variable

If you want to estimate the immediate impact of a variable-rate rise, enter the $300,000 variable balance into the calculator.

Your fixed portion would continue under its existing fixed-rate terms until that fixed period ends.

What Should I Do If My Repayments Are Going Up Because The Cash Rate Increased?

Start with the numbers rather than the headline.

1. Work Out The Actual Dollar Increase

Find out what the rate change means in:

• Dollars per month
• Dollars per year
• Percentage of your available household cashflow

A 0.25% increase may be manageable for one household and significant for another.

The size of the RBA movement alone does not tell you whether your mortgage is becoming uncomfortable.

2. Stress-Test Another 0.25% And 0.50%

Do not calculate only the increase that has already happened.

Use the calculator to test:

• Your confirmed new rate
• Another +0.25%
• Another +0.50%

Ask yourself: Would the mortgage still be comfortable at those repayments?

You do not need to predict exactly what the RBA will do next. Stress-testing helps you understand where your own financial pressure point sits.

3. Check Whether Your Current Rate Is Still Competitive

Your repayment can rise because rates have gone up.

But the more useful question may be: Am I still on a competitive rate for my circumstances?

You could:

• Ask your existing lender for a rate review or repricing
• Compare your rate with suitable alternatives
• Calculate whether refinancing costs would outweigh the potential saving

A lower advertised rate does not automatically make refinancing worthwhile. Fees, loan features, remaining loan term and your eligibility all matter.

4. Make More Of Your Offset Account

If your mortgage has a 100% offset account, money held there can reduce the balance on which home-loan interest is calculated.

For example, if:

• Loan balance = $600,000
• Offset balance = $50,000

Interest may effectively be calculated against $550,000, depending on the loan’s terms.

An offset will not necessarily reduce your lender’s required minimum repayment immediately, but it can reduce the amount of interest charged.

5. Don’t Fix Your Mortgage Just Because You’re Worried About Rates

A fixed rate can provide certainty, but certainty is not the same thing as suitability.

Home Loan Experts Mortgage Broker Ajar Rajbhandari has seen borrowers ask to fix their mortgage because they were worried about future increases.

In one case, the borrower’s longer-term goal was to pay the mortgage down quickly and build equity. Fully fixing the loan would have restricted some of the flexibility they wanted, so they ultimately chose a combination of fixed and variable lending.

Another investor had very different objectives and used a two-year fixed rate as part of their strategy.

The lesson is simple: Start with what you need the loan to do, then consider the loan structure. Don’t let a rate prediction make the decision for you.

Fixed rates can have limits on extra repayments, may offer fewer features and can involve break costs if you exit early.

6. Get Help Early If Repayments Are Becoming Difficult

If an increase would make your mortgage difficult to manage, it is usually better to investigate your options early rather than wait until repayments have already been missed.

Depending on your circumstances, options worth investigating may include:

• Asking your lender for a lower rate
• Refinancing
• Reviewing your loan structure
• Using available offset savings
• Discussing temporary hardship assistance with your lender

Not every option will be appropriate or available to every borrower.

Should I Fix My Mortgage If Interest Rates Are Rising?

There is no universal answer.

Fixing can make sense for borrowers who value certainty and are comfortable with the restrictions of a fixed-rate loan.

A variable loan may provide more flexibility for borrowers who want features such as:

• An offset account
• Larger additional repayments
• Easier refinancing
• Greater flexibility if their circumstances change

Some borrowers use a split loan, where part of the mortgage is fixed and part remains variable.

Should I Choose An Interest-Only Option If Interest Rates Are Rising?

Moving from principal-and-interest repayments to interest-only can reduce the required repayment for a period, but there are important trade-offs.

During an interest-only period:

• You generally do not reduce the principal through your required repayments
• You may pay more total interest over the life of the loan
• Your repayments can increase significantly when the interest-only period ends
• You still need to meet the lender’s eligibility requirements

Senior Mortgage Broker Jonathan Preston notes that borrowers experiencing cashflow pressure may want to understand the loan-structure options available before the pressure becomes more difficult to manage.

That could include discussing fixed, split or interest-only options depending on the borrower’s circumstances.

These options should be assessed based on the borrower’s needs and objectives rather than treated as an automatic response to an RBA increase.