The Reserve Bank's 25 basis point increase became effective on Wednesday, 30 September, so here are the key numbers, quotes and dates borrowers may want to keep close at hand.

As of today, the Reserve Bank of Australia's cash rate target sits at 4.60%. The Monetary Policy Board announced the 25 basis point increase after its meeting on Tuesday, 29 September 2026, and the new setting took effect on Wednesday, 30 September. The decision was unanimous, lifting the target from the 4.35% that applied at the time of the August Statement on Monetary Policy.

For anyone carrying a variable-rate home loan, a business overdraft or other floating-rate debt, the announcement is the start of a chain rather than the end of one. The cash rate is the interest rate on overnight loans between banks, and it anchors a wide range of other interest rates across the economy. How and when that flows through to an individual loan is a matter for each lender, not the RBA.

This cheat sheet pulls together what the RBA has actually said and published, so borrowers can separate the verified facts from the commentary.

The key numbers at a glance

  • Cash rate target: 4.60%, up 25 basis points from 4.35%.
  • Announced: Tuesday, 29 September 2026. Effective: Wednesday, 30 September 2026.
  • Vote: unanimous.
  • Inflation target: 2–3%, with a midpoint of 2.5%.
  • Headline inflation: 4.0% over the year to August 2026, according to the monthly CPI indicator.
  • Underlying inflation: the trimmed mean was 3.6% over the year to the June quarter 2026, while Governor Michele Bullock said "the underlying inflation rate's been about 3.5 per cent for the past six months".
  • Unemployment: the Governor said the rate "has risen from 3.5 per cent over the past couple of years to 4.6 per cent".
  • Next CPI release: 28 October 2026.
  • Next Board decision: 2:30 pm AEDT, Tuesday 3 November 2026.

The distinction between headline and underlying inflation matters. Headline CPI captures every price in the basket, including volatile items such as fuel. The trimmed mean strips out the largest price rises and falls each period to give a steadier read on the underlying trend. Both measures remain above the top of the 2–3% target band, which is the core reason the Board acted.

Why the Board moved now

The Board's statement was blunt that "inflation remains elevated" and that "recent inflation outcomes in Australia were stronger than expected at the previous meeting". It also said "Firms are experiencing cost pressures" and are increasing or planning to increase prices, and it pointed to "pressure on domestic capacity".

Overseas forces are adding to the picture. The statement noted that the Middle East conflict has "broadened", with "global energy prices now much higher" than when the August forecasts were prepared. It also said "AI-related demand is driving rapid growth in global prices for technology-related goods".

At her media conference, Governor Bullock summed up the Board's concern: "Inflationary pressures will persist for longer than previously expected." She also acknowledged the cost of the decision: "I know this decision is difficult for households with a mortgage and businesses."

The Board's worry is not only today's inflation rate but what happens if people come to regard high inflation as normal. The statement warned that high inflation must not become "embedded", and the Governor said: "It's critical that we stop expectations for high inflation from becoming embedded."

An illustration, not a forecast

What might 25 basis points mean in dollar terms? The following is a simple illustration only. It is not RBA data and does not reflect any particular lender's pricing.

Take a hypothetical $600,000 variable-rate loan. An increase of 0.25 percentage points in its interest rate adds $1,500 a year in interest ($600,000 × 0.0025), or roughly $125 a month before amortisation effects. On a hypothetical $300,000 balance, the same increase adds $750 a year, or roughly $62.50 a month on the same basis.

Actual changes to repayments depend on whether and when a lender adjusts its rates, the loan's remaining term, whether it is principal-and-interest or interest-only, and any offset or redraw balances. Borrowers on fixed rates will not see a change until their fixed period ends, although the rate they roll onto will reflect conditions at that time.

For context at the aggregate level, Governor Bullock said scheduled mortgage payments are "back up sort of around 10 per cent" of household disposable income.

What the Board said about what comes next

The forward guidance leaves little ambiguity about the direction of risk. 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."

Governor Bullock echoed that: "The Board will increase interest rates again if that's what's needed to get inflation down." She also indicated that the era of ultra-low rates is not expected to return: "We're not going back down to interest rates of zero or very close to zero."

On the question of recession, the Governor said: "That is not our central base case at this moment." The statement, however, described "heightened uncertainties", with the Middle East conflict still "unresolved" and scenarios where inflation could be higher and activity lower than forecast.

It is worth remembering that the RBA's most recent published forecasts, in the August Statement on Monetary Policy, were prepared when the cash rate was 4.35% – before the September increase. Those forecasts had trimmed mean inflation reaching the 2.5% midpoint by early 2028.

Questions borrowers may wish to consider in light of the decision include:

  • Has my lender announced whether, and from when, it will change its variable rate?
  • How much of a buffer does my budget have if repayments rise further?
  • When does any fixed-rate period on my loan end?
  • How might the 28 October CPI release and the 3 November decision affect my planning?

The bottom line

The 4.60% cash rate is now in effect, and the Board has made clear it is prepared to go further if inflation does not come down. The two dates to circle are 28 October, when the next CPI figures are released, and 3 November, when the Board next decides. Between now and then, borrowers may find it useful to understand the terms of their own loans and to keep an eye on the same data the RBA itself is watching.