Here we go again … The Reserve Bank of Australia (RBA) has raised the cash rate for a fourth time this year to 4.60%. Check out this week’s article to find out why they felt the need to pass on more borrowing pain to mortgage holders.

Following hikes in February, March and May, this latest 0.25% increase now brings the cash rate to the highest level it’s been in 15 years – since October 2011.

The RBA’s Monetary Policy Board said in a statement that since the previous RBA meeting, some of the upside risks to inflation had been materialising.

“There have been further disruptions to global oil supply and recent data suggest that growth and inflation in Australia have been higher than expected,” the statement said.

“Higher fuel prices have partially been passed through to prices of other goods and services. This inflation impulse is in addition to the effect of capacity pressures in the economy.”

Worse still, the rate hike pain for 2026 might not even be over yet, with the RBA signalling we could have another hike again before too long if inflation didn’t return to the 2-3% target range.

“The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed,” the RBA statement said.

How could this affect your mortgage repayments?

Unless you’re on a fixed-rate mortgage, your bank will likely soon follow the RBA’s lead and increase the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate hike means your monthly repayments could increase by about $77 a month.

That equals about $924 a year. Or $3696 annually if you also include the other three rate hikes.

If you have a $750,000 loan, your minimum monthly mortgage repayments may increase by about $115 a month. That’s $1380 per year, or $5520 including the previous three rises.

Meanwhile, a $1 million loan could go up by about $154 a month. That’s $1848 a year, and $7392 if you include the February, March and May hikes.

This all assumes that your lender automatically passes on the full 25 basis point increase to your home loan.

When did you last refinance your home loan?

This latest RBA hike is another tough pill to swallow for mortgage holders on a variable rate. It hurts, but there are still some steps you could potentially take to help offset the rate hike.

If it’s been some time since your last home loan review, now might be a good time to check in.

There’s a chance you might be able to improve your situation by switching to a lender with a lower-rate home loan – potentially giving you a rate cut of your own.

Other options we could help you explore include renegotiating with your current lender, switching to interest-only for a period of time, or debt consolidation.

Every household is unique, and we’re committed to helping you find a solution that fits your needs.

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