The RBA is tipped to hike to 4.60 per cent on Tuesday. Your lender has already moved.

The Reserve Bank board meets today and tomorrow, and at 2:30pm AEST on Tuesday 29 September it will announce whether the cash rate stays at 4.35 per cent or rises to 4.60 per cent. Money markets put the odds of a 25 basis point hike at about 90 per cent. All 29 economists in Bloomberg's survey expect one, and so do all four major banks. If it happens, the cash rate will be at its highest level since November 2011. Governor Michele Bullock holds her press conference at 3:30pm.

Here is the part that matters more than the announcement: your lender has already moved. In August we wrote that lenders were cutting variable rates while the RBA sat still. That is over. The direction has turned. According to Australian Broker, 18 lenders lifted at least one fixed rate in September. CBA raised fixed rates by up to 0.48 percentage points, taking its lowest one-year rate from 6.49 to 6.78 per cent and its five-year rate from 6.79 to 6.94 per cent. Westpac went up by as much as 0.45, with its five-year rate now 7.14 per cent. Macquarie raised twice, on 8 and 24 September, and now sits at 6.49 per cent for one year and 6.64 per cent for four and five years. NAB added 0.15 and ANZ up to 0.20, which leaves ANZ with the lowest big four fixed rate at 6.49 per cent for one and two years. ING, St George, ubank, Aussie and others have also moved.

Why the board is expected to move

The August hold was closer than it looked. The minutes show the board weighed a hike against a hold before voting unanimously to stay at 4.35 per cent, and that "several members judged that it was quite possible that the upside risks to the inflation forecast would crystallise, requiring some further tightening." On 18 September Bullock told the House Economics Committee that "some of these upside risks to inflation appear to be materialising", pointing to higher global energy, agricultural and technology prices. Within days CBA's Belinda Allen and ANZ's Adam Boyton pulled their forecast hikes forward from November to September, joining NAB and Westpac. ANZ also expects a second hike in November, which would take the cash rate to 4.85 per cent.

The data the board has in hand is mixed, which is why this is a hike into a softening economy. Headline inflation was 3.5 per cent in July and the trimmed mean 3.6 per cent, both still above the 2 to 3 per cent target. Unemployment has risen to 4.6 per cent, and national home values have fallen for five straight months. The board is telling you, in its own words, that it is more worried about inflation than about either of those.

Scenario one: a hike to 4.60 per cent

If the board lifts the cash rate by 25 basis points and your lender passes it on in full, here is what happens to a monthly repayment on a 30-year principal and interest loan. We assume a starting variable rate of 6.25 per cent, which sits at the low end of the 6.24 to 6.62 per cent range SBS reports for owner-occupier variable rates, rising to 6.50 per cent. These are illustrative calculations, rounded to the dollar, not quotes.

• $500,000 loan: $3,079 a month rises to $3,160, about $82 more a month or $981 a year.
• $600,000 loan: $3,694 a month rises to $3,792, about $98 more a month or $1,177 a year.
• $750,000 loan: $4,618 a month rises to $4,741, about $123 more a month or $1,472 a year.
• $1,000,000 loan: $6,157 a month rises to $6,321, about $164 more a month or $1,962 a year.

If you have less than 30 years left on your loan, the increase in dollars is a little smaller; if you are already paying a rate in the high 6s, it is a little larger. The bigger hit is to anyone still buying. Lenders assess you at your rate plus APRA's 3 percentage point buffer, so the assessment rate in our example goes from 9.25 to 9.50 per cent. On the same income and expenses, a borrower approved for $800,000 today would be approved for roughly $783,000 after a hike, a cut of about 2.2 per cent. The ABC estimates an average single full-time earner has already lost more than $47,000 of borrowing power since January.

Timing matters too. Lenders announce whether and when they will pass on a change in the days after a decision, and the new rate applies from an effective date they set. Your lender has to tell you the new repayment before it starts, and if you pay more than the minimum already, check whether it lifts your payment automatically.

Scenario two: a hold at 4.35 per cent

A hold would surprise almost every forecaster in the country, so read it as a delay rather than an all-clear. Variable repayments would stay where they are. Borrowing power would stay where it is. The board would almost certainly keep its warning that it is prepared to tighten further, and attention would swing straight to the August CPI the next morning and the November meeting on 2 and 3 November.

What a hold would not do is undo the fixed rate increases. Lenders price fixed loans off wholesale funding costs, which already assume higher rates over the next year or two. Those costs do not reverse because the board waits one more meeting. If you were hoping a hold would bring back the cheaper fixed rates of the winter, it will not.

The number that lands the next day

The ABS releases the August Consumer Price Index at 11:30am AEST on Wednesday 30 September, the day after the decision. The fuel excise cut ended on 2 August, so August is the first full month without it. Westpac expects headline inflation to rise to about 4.0 per cent from 3.5 per cent, with the trimmed mean steady at 3.6 per cent. A print at or above that would strengthen the case for ANZ's November call, whichever way Tuesday goes.

Should you fix now?

Most fixed rates now sit between 6.5 and 7 per cent, and some five-year rates are above 7. A handful of smaller lenders are still under 6 per cent: Police Credit Union's one-year owner-occupier rate of 5.79 per cent is the sharpest we have seen, although its comparison rate is 6.9 per cent, which tells you what happens when the fixed period ends. Those offers are likely to be pulled or repriced quickly if the board moves.

Do the sums before you lock in. On $600,000 over 30 years, fixing at ANZ's 6.49 per cent costs about $3,788 a month, around $94 more than a 6.25 per cent variable rate costs today and almost exactly what that variable rate would cost after one hike. So fixing now pays off only if rates go up more than once while you are fixed, as ANZ expects. If the cycle stops at 4.60 per cent and cuts come in 2027, as CBA's economists expect, you will have paid extra for certainty and may face break costs to get out. Fixing is a reasonable decision if a second hike would put your budget under real pressure. It is a poor decision if you are doing it because the headlines are loud. Splitting the loan, part fixed and part variable, is often the honest middle ground: it caps the damage from a second hike without betting the whole loan on it.

What to do before 2:30pm on Tuesday

1. Ring your lender's retention team today. Ask what variable rate they will give you to stay. Existing customers are routinely offered 0.10 to 0.30 percentage points off for asking, and a discount negotiated now carries through whatever the board does.
2. Check the rate on your latest statement, not the one you signed up to. If you are more than about 0.50 percentage points above the sharpest variable rates for your loan size and LVR, you have a refinance case either way. Remember that home values have fallen for five months, so check your equity before you apply anywhere.
3. Do not panic-fix. Today's fixed rates already assume at least one hike. Fix only if you have run the numbers and a second rise would genuinely break your budget, and read the fine print on break costs and the revert rate first.
4. Build an offset buffer. Start putting the extra $80 to $165 a month from the table above into your offset or redraw now. If the board hikes, you are already used to the higher payment. If it holds, you have cut your interest and built a cushion for November.
5. If you are buying, ask your broker or lender to recheck your pre-approval at the higher assessment rate. A borrowing limit set in August may not hold after Tuesday.

Disclosure: Your Finance Guide works in conjunction with ALG Australian Lending Group (ACL 505575). Licensed brokers who meet our criteria pay Your Finance Guide a partnership fee to receive enquiries from this site. The fee is paid by the broker, not by you, and is not added to your loan. Brokers are usually also paid a commission by the lender when a loan settles. The first step in this article, calling your existing lender for a retention rate, pays a broker nothing and is often the right first move. Market pricing, forecasts and lender rates are as reported on 28 September 2026 and change often. Repayment and borrowing power figures are illustrative calculations on the stated assumptions, not quotes. This is general information, not personal advice.