The RBA increased the cash rate by 0.25 percentage points to 4.10% at its March 2026 meeting.
Inflation remained above the RBA’s 2-3% target band heading into the March 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 4.10% at its March 2026 meeting.
This follows another rate hike in February 2026 and three cuts in 2025, across 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 March decision.
Why did the RBA raise rates in March?
Inflation remains elevated: CPI rose 3.8% over the year, remaining above the RBA’s 2-3% target band.
Growth steady: GDP rose 0.8% in the quarter and 2.6% over the year to December 2025.
Labour market resilient: The unemployment rate was 4.1%, indicating relatively stable employment conditions.
Inflation risks remain: Policymakers are seeking further progress in reducing price pressures across the economy.
What a rate rise could mean for your repayments
If the latest rate rise is passed on in full, some borrowers may see their monthly repayments increase depending on their loan size and lender.
For example, under a simplified scenario:
Example loan | Estimated monthly increase | Estimated annual increase |
|---|---|---|
$700,000 loan over 30 years | $101 | $1,209 |
Actual repayment increases will depend on the borrower’s interest rate, loan structure and lender pricing.
This example assumes an interest rate increase from 3.85% to 4.10%, representing a 0.25% change.
Even relatively small changes in interest rates can affect repayments and borrowing capacity. Reviewing your home loan may help ensure your rate remains competitive.
Even small increases in interest rates can reduce borrowing capacity because lenders assess borrowers at higher repayment levels.
In a typical lending scenario, a 0.25% rate increase could reduce borrowing power by around $20,000-$22,000, depending on income, expenses, and lender policy.
What a rate rise could mean for you
Interest rate increases can affect borrowers differently depending on where they are on their property journey. Here are a few things different borrowers may want to consider.
Borrower type | What a rate rise could mean |
|---|---|
First home buyers | • Recalculate your borrowing power: Higher rates may reduce how much you can borrow. |
Investors | • Review rental yields and cash flow against higher borrowing costs. |
Refinancers | • Check whether your lender passes on the rate rise in full and when it takes effect. |
While rates have increased, reviewing your loan or borrowing position may help you stay prepared for further changes.
Why it may still be worth reviewing your loan
A rate rise doesn’t necessarily mean your current loan is the most competitive available. Many borrowers remain with lenders who do not always adjust rates at the same pace as the broader market. Reviewing your loan may help identify opportunities to improve your rate or loan features.
What borrowers could consider next
If you’ve been thinking about reviewing your home loan, a rate rise may be a good time to reassess where you stand. An Aussie Broker can:
Check whether your current rate is still competitive
Compare options across 25+ lenders**
See whether refinancing could help reduce your repayments or improve your loan features
The outlook from here
With inflation still above the 2–3% target band, policymakers are continuing to monitor price pressures and broader economic conditions. Future interest rate decisions will likely depend on how inflation, wages, and economic activity evolve in the months ahead. For borrowers, this may mean reviewing and comparing loan options is worth considering rather than waiting for the next RBA move.
Stay on top of your loan
Interest rates can move quickly, and different lenders may respond differently to changes in the cash rate. Reviewing your home loan regularly may help ensure your loan still suits your needs as conditions change.