The RBA increased the cash rate by 0.25 percentage points to 3.85% at its February 2026 meeting.
Inflation remained above the RBA’s 2-3% target band heading into the February decision.
A rate rise may increase repayments for some borrowers, depending on their lender and loan type.
Reviewing your home loan now can help you understand your options if your repayments are set to rise.
A rate rise doesn’t mean you’re out of options. One call to Aussie could help you review your rate and repayments.
The Reserve Bank of Australia has increased the cash rate to 3.85% at its February 2026 meeting.
This follows three cuts in 2025, February, May, and August, with the Bank now responding to inflation that remains above its target range.
While inflation eased through mid-year, it remained above the RBA’s 2-3% target band heading into the February decision.
Why did the RBA raise rates in February?
Inflation pressures: Inflation remained above the RBA’s 2-3% target band.
Growth steady: GDP rose 0.4% in the quarter and 2.1% over the year to September 2025.
Labour market: The unemployment rate was 4.4% in October, indicating a relatively stable labour market.
Past rate moves still flowing through: After three reductions in 2025, the Bank lifted rates in February as it continues to focus on inflation.
What a rate rise could mean for your repayments
If the February rate rise is passed on in full, some borrowers may see their monthly repayments increase, depending on their loan size and lender.
Here’s an example of how a 0.25% rate rise could affect repayments on a variable home loan:
Loan size | Estimated monthly increase | Estimated monthly repayment |
$400,000 | +$64 | $2,437 |
$600,000 | +$97 | $3,655 |
$700,000 | +$113 | $4,265 |
$800,000 | +$129 | $4,874 |
$1,000,000 | +$161 | $6,092 |
For borrowers on variable rates, or those coming off a fixed term, reviewing your home loan can help you understand how changes like this could affect your budget and what options may be available.
Why you still need to take action
A rate rise doesn’t mean you’re out of options. Many borrowers stay with lenders that automatically pass on increases, even when more competitive rates may be available.
Reviewing your loan could help you understand whether switching could soften the impact.
What to do now
If you’ve been waiting for a reason to review your home loan, a rate rise is a good time to check where you stand.
An Aussie Broker can:
Check whether your rate is still competitive
Compare 25+ lenders** and 4,000+ home loan options
Show how different rates could affect your repayments
The outlook from here
February’s decision reflects the RBA’s ongoing focus on bringing inflation back within its target range.
The Bank has signalled future decisions will remain data-dependent, as it continues to monitor inflation, wages and broader economic conditions.
Don’t let a rate rise catch you off guard
Even after a rate rise, interest rates can vary widely between lenders. Reviewing your home loan now could help you understand whether you’re on a competitive rate.