RBA expected to hike cash rate to 4.6%, its highest level since 2011
Summary
Australia’s central bank, the Reserve Bank of Australia (RBA), is expected to raise its main interest rate to 4.6%, the highest since 2011. This increase will raise mortgage costs, lower house prices, and reduce how much people can borrow, putting pressure on household budgets.Key Facts
- The RBA plans to raise the cash rate from 4.35% to 4.6%, marking the fourth increase in 2026.
- Typical home loan interest rates could rise to about 6.5%, increasing mortgage repayments by roughly $119 a month for an average mortgage.
- Since January, average mortgage repayments have increased by nearly $480 monthly due to rate rises.
- Rising petrol prices linked to the US-Iran conflict have added about $44 to the cost of filling a 55-litre tank.
- House prices in Australia have fallen more than 4% from their peak earlier this year and may fall another 7.3% by mid-2027.
- Borrowing power has dropped by about $47,400 for someone earning an average wage, limiting people's ability to buy homes.
- Home loan inquiries have declined from nearly 15,000 a week in early 2026 to just over 12,000 recently.
- The RBA is increasing rates despite a weak economy because inflation remains above its 3% target level.
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