Update: The RBA has increased the cash rate to 4.10% at its March 2026 meeting. Here’s what the decision could mean for borrowers.
• The RBA cash rate currently sits at 3.85% following February’s increase.
• Economists are divided on whether March will see a hold or further move.
• Even without a rate change, refinancing may help reduce repayments.
• Savers and borrowers can both feel the impact of RBA decisions.
Following February’s rate increase, most major banks and market economists expect the RBA to pause in March as it assesses incoming inflation, employment and spending data.
Some commentators suggest that for another hike to occur so soon, economic data would likely need to come in stronger than forecast.
Others believe the RBA may prefer to wait and evaluate how previous increases are flowing through to households and businesses.
The final decision will depend on updated economic data and the Board’s assessment of inflation risks and financial stability.
What is the RBA cash rate?
The RBA cash rate is the interest rate set by the Reserve Bank of Australia for overnight loans between banks.
It influences the cost of borrowing across the economy, including many variable home loans and savings products.
When the cash rate moves, lenders review their own interest rates. However, each lender makes independent decisions about if, when and how much they adjust.
Source: Reserve Bank of Australia
What are economists predicting for March?
Commonwealth Bank economists supported the February increase to 3.85%, noting that inflation pressures and resilient economic conditions warranted tighter policy.
In their February commentary, they indicated that future moves would depend on how inflation and labour-market data evolve over the coming months.
National Australia Bank’s February economic update suggests the likelihood of a further rise in March is low, with its economists signalling that policy may remain on hold in the near term while the RBA assesses recent data.
NAB’s broader outlook still reflects inflation risks, but immediate further tightening is not their base case.
Westpac’s economists have indicated that while inflation is easing, it remains above target and is likely to keep monetary policy restrictive for some time.
They have emphasised that future moves will depend on how inflation and labour-market data evolve.
Market pricing and some forecasts point to the likelihood of the next rate change occurring later in 2026, such as around May, even if the RBA holds in March.
These bank forecasts highlight that views differ on timing and extent of future moves, and incoming inflation and labour-market data will be important in shaping the RBA’s next steps.
What a March rate decision could mean for borrowers
If the RBA holds:
A pause may provide some short-term certainty for households managing higher repayments after February’s increase. However, lenders make independent pricing decisions, so rates can still move outside of RBA changes.
If the RBA hikes again:
Another increase could add further pressure to variable-rate borrowers and households already managing higher living costs. Even a 0.25% rise can increase monthly repayments on a typical home loan.
If the RBA cuts later this year:
Should inflation ease sustainably, rate reductions later in 2026 may be possible. Whether and how much lenders pass on would vary.
Wondering whether interest rates could rise again this year and what that might mean for you? Read our guide on whether interest rates will rise and what you can do to prepare.
Banks may not pass on future RBA moves in full
Even when the RBA adjusts the cash rate, lenders are not required to pass on the full change. Some may move earlier, later, by a smaller amount or by more than the RBA change.
If you’re unsure how any move applies to you, reviewing your loan can bring clarity.
You might also be interested in: Which banks have passed on the RBA’s latest interest rate?
What it means for savers
Rate decisions don’t just affect borrowers.
If rates rise, savings accounts and term deposits may see improved returns, although not all providers move at the same speed or by the same amount.
If rates hold or fall, savers may see returns stabilise or ease. It can be worth reviewing whether your savings structure still suits your goals.
Balancing debt management and savings strategy becomes increasingly important during periods of rate uncertainty.
Cost of living pressures remain in focus
Higher interest rates can flow through to mortgage repayments, rents and business costs. For many households, that adds to existing cost of living pressures.
That’s why even small rate movements matter. Reviewing your loan structure, repayment strategy, and household budget can help you stay prepared, regardless of the RBA’s next move.
What the next RBA decision could mean for you
While economists debate the next move, it can help to think about what different outcomes could mean for your own plans.
If the RBA… | What you might want to think about |
|---|---|
Raises rates | • Review your borrowing power. Higher rates can reduce how much you can borrow. |
Holds rates | • A pause can be a good time to review your loan and borrowing capacity. |
Cuts rates | • Lower rates could increase borrowing power and reduce repayments. |
If you’re unsure what the next RBA move could mean for your situation, an Aussie Broker can help you review your options and plan your next step.
Tips to prepare for possible rate changes
• Review your current rate and repayment amount
• Check when you last refinanced or negotiated with your lender
• Build or maintain a buffer where possible
• Consider whether fixed, variable or split options suit your situation
• Talk to an Aussie Broker if you’re unsure what’s right for you
With over 1,000 Aussie Brokers across 200+ stores, we can help you understand your options and feel confident about your next step.
Need help reviewing your home loan?
If you’re unsure how a rate hold, hike or future cut could affect you, an Aussie Broker can help you understand your options.
We’ll look at your current rate, loan structure and goals, and help you decide whether refinancing, restructuring or staying put makes sense for your situation.
You can get in touch online, over the phone, or by visiting an Aussie store near you.
Book a free^ chat with an Aussie Broker to review your current loan and explore your options.