Mortgage repayments in Australia have risen sharply in 2026 — and for most variable-rate borrowers, the full cost of two consecutive RBA rate hikes is only now landing in their bank accounts. The Reserve Bank raised the cash rate by 25 basis points in February and again in March, bringing the official rate to 4.10 per cent. Combined, those two moves have added hundreds of dollars per month to household budgets across the country — and a third hike may be coming in May.
This article sets out the exact repayment impact by loan size, based on a standard 25-year principal-and-interest loan at the current approximate variable rate of 6.10 per cent. It also models what a May hike would add — so you can stress-test your own position before the next decision on 5 May 2026.
What the Two Hikes Have Cost Borrowers
Before February, the RBA cash rate sat at 3.60 per cent — the floor reached after three cuts through 2025. Most lenders were offering variable rates of around 5.60 per cent. By March 2026, the cash rate had climbed 50 basis points in eight weeks, and the typical outstanding variable rate had risen with it to approximately 6.10 per cent.
For every 25 basis point increase, a lender charging that rate passes on roughly $15 more per month for every $100,000 outstanding on a 25-year loan. Across two hikes, that is approximately $30 per $100,000 — which sounds modest in isolation but compounds quickly at the loan sizes most Australians carry.
According to the Australian Bureau of Statistics Housing Finance data, the average new owner-occupier loan in Australia sits at approximately $624,000. At that size, the combined impact of the February and March hikes is approximately $187 per month in additional repayments — money that was not in household budgets at the start of the year.
For a detailed explanation of why the RBA made these decisions and what the board said, see our RBA rate rise explainer.
Your Mortgage Repayments at 4.10% — Full Breakdown by Loan Size
The table below shows estimated monthly principal-and-interest repayments at three scenarios: before the February hike (5.60% variable rate), the current position after both hikes (6.10%), and a projected position if the RBA raises again in May to 4.35% (6.35% variable).
All figures assume a 25-year remaining loan term and a standard variable rate that moves in line with the cash rate. Your actual repayment will vary depending on your lender, loan type, and remaining term.
| Loan Balance | Before Feb 2026 (5.60%) | Now — Apr 2026 (6.10%) | Feb + Mar Combined Increase | If May Hike (6.35%) | Total Increase vs Jan 2026 |
|---|---|---|---|---|---|
| $300,000 | $1,860 | $1,951 | +$91 | $1,998 | +$138 |
| $400,000 | $2,480 | $2,601 | +$121 | $2,664 | +$184 |
| $500,000 | $3,100 | $3,252 | +$152 | $3,330 | +$230 |
| $600,000 | $3,720 | $3,902 | +$182 | $3,995 | +$275 |
| $750,000 | $4,650 | $4,877 | +$227 | $4,994 | +$344 |
| $1,000,000 | $6,200 | $6,503 | +$303 | $6,659 | +$459 |
| $1,250,000 | $7,750 | $8,129 | +$379 | $8,324 | +$574 |
| $1,500,000 | $9,300 | $9,755 | +$455 | $9,989 | +$689 |
Estimates based on a 25-year principal-and-interest loan. Variable rate assumed to move in full with cash rate. Source: calculations cross-referenced against RBA cash rate data and ABS Housing Finance. Individual repayments will vary — use your lender’s mortgage calculator for your specific loan.
How to Read This Table
The “Now” column is where most variable-rate borrowers sit today, assuming their lender passed on both hikes in full. Some lenders did not pass on the cuts in 2025 completely, which means their starting point heading into 2026 was already slightly elevated — and their combined increase may be marginally lower than shown.
The “If May Hike” column assumes ANZ, CBA and NAB’s current forecast of one further 25 basis point increase at the May 5 board meeting. It does not reflect Westpac’s more aggressive forecast of three additional hikes taking the cash rate to 4.85 per cent. If Westpac’s scenario plays out, borrowers on a $600,000 loan would be paying approximately $455 per month more than they were in January — not $275.
What a May Rate Hike Would Add
Three of Australia’s four major banks — ANZ, CBA and NAB — are currently forecasting a further 25 basis point increase at the RBA’s May 5 meeting. Westpac is forecasting three more hikes through to August, taking the cash rate to 4.85 per cent.
The key driver is inflation. The RBA’s preferred measure of underlying inflation — trimmed mean CPI — sat at 3.3 per cent in the 12 months to February 2026. That is outside the RBA’s 2 to 3 per cent target band, and the March CPI data, which will capture the fuel price spike from the Middle East conflict, has not yet been published. Economists are expecting the March figure to show a meaningful jump.
If March quarterly CPI confirms inflation is re-accelerating rather than moderating, the case for a May hike strengthens significantly. Governor Michele Bullock said after the March meeting that the board “will do what is necessary” to return inflation to target — language that leaves the door open to further tightening.
The Annual Cost of 2026’s Rate Rises
To put the monthly figures in a longer-term frame:
| Loan Balance | Monthly increase (Feb+Mar) | Annual cost of two hikes | Annual cost if three hikes (to 4.35%) |
|---|---|---|---|
| $400,000 | +$121 | +$1,452 | +$2,208 |
| $600,000 | +$182 | +$2,184 | +$3,300 |
| $750,000 | +$227 | +$2,724 | +$4,128 |
| $1,000,000 | +$303 | +$3,636 | +$5,508 |
Annual figures calculated by multiplying monthly increase by 12.
For a household already dealing with higher electricity bills, grocery costs and fuel prices, an additional $2,000 to $3,600 per year in mortgage costs represents a meaningful reduction in disposable income. For context on how these pressures are stacking up, see our coverage of what is getting more expensive in Australia right now.
Fixed-Rate Borrowers — What Happens When Your Term Ends
Not all mortgage holders are immediately affected. Australians on fixed-rate loans locked in their rate at settlement and will not see repayment changes until their fixed term expires.
However, a significant number of fixed-rate terms set during the ultra-low rate period of 2021 and 2022 are either already expired or due to expire in 2026. When those terms end, borrowers roll onto their lender’s revert rate — typically the standard variable rate, which is now around 6.10 per cent or higher.
For a borrower who locked in at 2.50 per cent in 2022 on a $700,000 loan and is rolling off now, the jump in monthly repayments is approximately $1,200 per month — not the $200 or $300 that the two 2026 hikes represent. The 2026 rate rises are a secondary shock on top of what was already a very large adjustment for expiring fixed terms.
If your fixed rate is expiring in the next three to six months, the practical steps are:
- Contact your lender now about rollover rates — do not wait for the expiry notice
- Compare variable rates from other lenders — refinancing is often possible and can save hundreds per month
- Stress-test your budget against the “If May Hike” column in the table above, not just the current rate
Five Things Variable-Rate Borrowers Can Do Right Now
Higher rates are a cost you cannot avoid, but there are actions that reduce the impact.
1. Check whether your lender passed on the full hike. Some lenders have moved more slowly than others. Verify your current rate on your next statement. If it has not moved by the full 50 basis points, it may still be coming.
2. Compare your rate against the market. Lenders compete aggressively for refinancers. A borrower on 6.40 per cent moving to 6.00 per cent on a $700,000 loan saves approximately $200 per month without changing anything else.
3. Increase your repayment voluntarily — even slightly. Paying $100 more per month than the minimum on a $600,000 loan shortens your loan term and reduces total interest paid by more than the $100 suggests. It also builds a buffer against future rises.
4. Review your offset account balance. If you have savings sitting in a transaction account earning little or no interest, moving them to an offset account linked to your mortgage reduces the interest charged on your outstanding balance. At 6.10 per cent, every $10,000 in offset saves approximately $610 per year in interest.
5. Stress-test one level higher. Use the “If May Hike” column in the table above as your planning figure — not the current rate. If that number creates genuine cash flow stress, you need a plan before May 5, not after.
What Happens at the Next RBA Meeting
The RBA’s next board meeting is on 5 May 2026. The decision will hinge on:
- The March quarterly CPI data, due in late April — this will be the first official measure of the fuel price spike from the Middle East conflict
- Labour market data showing whether employment growth remains above forecast
- Global conditions, particularly the trajectory of oil prices and the conflict in the Middle East
Three of the four major banks are currently calling a May hike. If the March CPI figure comes in at or above 4 per cent year-on-year — which several economists have flagged as possible given fuel — the probability of a third consecutive hike increases sharply.
Fenro will report on the March CPI data and the May RBA decision as they are released.
FAQ
How much has my mortgage gone up in 2026?
If you have a standard variable-rate loan, your repayments have increased by approximately $30 per $100,000 outstanding across the two 2026 hikes combined (February and March). On a $600,000 loan, that is approximately $182 per month more than in January.
What is the current variable mortgage rate in Australia?
After the two 2026 hikes, the RBA cash rate sits at 4.10 per cent. Most major lenders are pricing standard variable rates at approximately 6.00 to 6.30 per cent for owner-occupiers with an 80 per cent loan-to-value ratio. Your rate will depend on your lender, loan size, and repayment type.
Will the RBA raise rates again in May 2026?
ANZ, CBA and NAB are currently forecasting a further 25 basis point increase at the May 5 meeting, taking the cash rate to 4.35 per cent. Westpac is forecasting three more hikes to 4.85 per cent. The March CPI data, due in late April, is the key variable.
Should I fix my mortgage rate now?
This article does not constitute financial advice and cannot recommend whether to fix or remain variable — that depends on your loan size, income stability, how long you intend to stay in the property, and your tolerance for rate risk. Speaking with a licensed mortgage broker before the May meeting is the most practical step if you are uncertain.
Does the rate rise affect renters?
Yes, indirectly. When investors and landlords face higher mortgage costs, those costs tend to flow through to rents over time. Australia’s rental vacancy rate is approximately 1.2 per cent — well below a balanced market. For the full picture of rental conditions, see our rent prices in Australia 2026.
Conclusion
Two consecutive RBA hikes have added $91 to $455 per month to Australian mortgage repayments depending on loan size — and three of the four major banks expect a third hike in May. For households already absorbing higher fuel, grocery and electricity costs, the cumulative pressure is real. The most important step is knowing exactly where your repayments stand now, stress-testing the next possible move, and acting before the next RBA decision on 5 May.
This article is for informational purposes only and does not constitute financial, legal, or mortgage advice. Repayment figures are estimates based on a standard 25-year principal-and-interest loan and are cross-referenced against publicly available data from the Reserve Bank of Australia and ABS. Actual repayments depend on your specific loan terms, lender, and rate. Please consult a licensed mortgage broker or financial adviser for advice specific to your situation.
