The Reserve Bank of Australia (RBA) raised the official cash rate by 0.25 percentage points to 4.10% at its February 2026 board meeting, reversing three rate cuts that had taken place throughout 2025. For Australian mortgage holders, this means higher repayments — and understanding exactly how much is critical for household budgeting.
How Much Will My Repayments Increase?
A 0.25% rate rise has a real dollar impact depending on your loan size. Here are the approximate monthly increases for common loan amounts:
These figures are approximate and based on a 30-year principal and interest loan. Use our rate rise calculator to get your exact repayment increase.
Why Did the RBA Raise Rates in February 2026?
After cutting rates three times during 2025 to stimulate the economy, the RBA reversed course in February 2026 because inflation remained stubbornly above the 2–3% target band. The RBA Board cited persistent services inflation and a tight labour market as key reasons for the increase.
RBA Governor Michele Bullock stated the Board remains committed to returning inflation to target, and that further increases remain on the table if inflation does not ease sufficiently.
What Should You Do Now?
1. Check if your lender has passed on the increase
Most variable rate lenders pass on RBA rate changes within 2–4 weeks of the decision. Check your lender’s website or your next statement to confirm your new rate.
2. Compare rates — you may be able to refinance
With rates rising, now is a good time to compare what other lenders are offering. The difference between your current rate and the best available rate could save you hundreds of dollars per month.
3. Consider an offset account
An offset account reduces the balance your interest is calculated on, effectively lowering your rate without refinancing. Even $20,000 in an offset account saves meaningful interest at current rates.
4. Make extra repayments while you can
If your budget allows, making extra repayments reduces your loan balance faster, which reduces the amount of interest you pay over the life of the loan.
Related Calculators
Rate Rise Impact Calculator — See Your Exact Repayment Increase →Home Loan Calculator — Calculate Repayments at Any Rate →Best Home Loan Rates — Compare Lenders Right Now →Offset Account Calculator — See How Much You Could Save →
Disclaimer: This article is for general informational purposes only and does not constitute financial advice. Always consult a licensed financial adviser before making financial decisions.