RBA decision 29 September 2026: what a rate rise means for your pay packet
The big four banks expect a hike on Tuesday. Here is what 0.25% costs on your mortgage, measured in pay.
The Reserve Bank announces its next cash rate decision on Tuesday 29 September at 2:30pm AEST, and almost everyone now expects it to go up.
What's expected
The cash rate has sat at 4.35% since the RBA held in August, after three increases earlier in 2026. All four major banks now forecast a 0.25 percentage point rise to 4.60% on Tuesday (Aussie). ANZ and Citi go further and expect another rise in November, which would take the cash rate to 4.85%.
Markets agree. According to CommBank, financial markets are pricing roughly a 90% chance of a September move, up from about 30% before the July inflation figures (CommBank).
Why rates are going up
Three things pushed forecasts forward from November to September: inflation still running above the RBA's 2 to 3% target, higher oil prices linked to the Middle East conflict, and tougher language from the RBA itself. Governor Michele Bullock told a parliamentary committee on 18 September that a more hawkish approach is now needed to get inflation back down (Canstar).
What 0.25% costs you, in pay
Mortgage repayments come out of your after-tax pay, so a rate rise is really a pay cut. The table below shows the extra monthly repayment on a 25-year loan going from 6.50% to 6.75%, and the pre-tax pay cut that's equivalent to on an $85,000 salary.
| Loan balance | Extra a month | Extra a year | Like a pay cut of |
|---|---|---|---|
| $400,000 | +$63 | +$754 | $1,109 |
| $500,000 | +$79 | +$942 | $1,386 |
| $600,000 | +$94 | +$1,131 | $1,663 |
| $750,000 | +$118 | +$1,413 | $2,079 |
| $1,000,000 | +$157 | +$1,885 | $2,771 |
Example rate only. Principal and interest, 25 years remaining. Pay cut figure uses 2026–27 resident tax rates and the Medicare levy.
What to do this week
If the RBA moves, your lender decides whether and when to pass it on. Most announce within days and apply it to variable loans within a few weeks, and they must tell you your new repayment in writing. If you're on a fixed rate, nothing changes until the fixed term ends.
People commonly soften the hit by parking spare cash in an offset account, asking their lender for a sharper rate, or comparing refinance offers. This is general information, not financial advice.
We'll update this article after the announcement on Tuesday afternoon.
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