Each of the four rate rises delivered in 2026 added another layer to monthly mortgage bills, and the Reserve Bank's own officials say household repayments are now back near their previous peak as a share of income.

Ask a borrower with a variable-rate home loan to describe 2026 and the answer may come down to four dates on the calendar: 3 February, 17 March, 5 May and 29 September. At each of those meetings, the Monetary Policy Board lifted the cash rate target by 25 basis points. Together, they took it from 3.60 per cent to 4.60 per cent.

Each move was modest on its own. Stacked together, they have changed the arithmetic of household budgets. This article follows those four meetings through to the place most people feel them: the monthly repayment.

How a cash rate decision reaches a home loan

The cash rate is the Reserve Bank's main policy lever, but borrowers do not pay it directly. What they pay is the interest rate set by their lender. Assistant Governor (Financial Markets) Christopher Kent said in August that "Lending and deposit rates have increased in line with the cash rate," indicating that the first three rises of the year were broadly passed on.

That pass-through is how monetary policy works on spending. Higher repayments leave households with less to spend elsewhere, which in turn eases demand across the economy. Governor Michele Bullock was direct about the purpose at her 29 September media conference: "Higher interest rates are needed to ensure inflation returns to target."

Four meetings, four steps: an illustration

To show how the increases add up, consider a hypothetical example. This is an illustration only, not RBA data, and it is not a prediction of any borrower's actual repayments. It assumes a $400,000 variable principal-and-interest loan over 30 years, with monthly repayments, a hypothetical starting rate of 5.60 per cent, and a lender that passed on each 25 basis point move in full.

  • After the February rise (rate 5.85 per cent): repayments move from $2,296.32 to $2,359.76, up $63.44 a month.
  • After the March rise (6.10 per cent): $2,423.98, a further $64.22.
  • After the May rise (6.35 per cent): $2,488.94, a further $64.96.
  • After the September rise (6.60 per cent): $2,554.64, a further $65.70.

In this illustration, the four moves add about $258.32 to the monthly repayment, or roughly $3,100 a year. Each step is slightly larger than the last because each increase applies to a loan that is already carrying a higher rate. Actual rates and outcomes vary by lender and borrower, including loan size, remaining term, and whether a borrower has an offset account or is ahead on repayments.

The pattern also shows why the August meeting matters. When the Board held the cash rate at 4.35 per cent in August, a borrower in this example would have seen no change that month, which is why the illustration moves straight from May to September.

What the RBA says about the repayment burden

Rather than individual loans, the Reserve Bank looks at repayments across the household sector. Speaking on 13 August, after the first three rises but before the fourth, Kent said: "Scheduled mortgage payments have risen and are now close to their 2024 peak as a share of household disposable income."

The September increase has added to that. Asked about repayments on 29 September, Bullock said mortgage payments were "back up sort of around 10 per cent of" disposable income, an approximation she offered while comparing it with "when we had interest rates at 4.35 per cent, so they'll go up a bit further."

The October Financial Stability Review reinforced the point, noting that "Scheduled mortgage payments have been the largest claim on household income". Bullock also acknowledged the human side of the policy: "I know they don't understand why we have to do this and it hurts them."

Not every household is affected in the same way. Bullock pointed out that "a lot of people have a mortgage, and then they have an offset account, which sits in the background", and that "the amount of money in those offset accounts has actually grown quite a lot over the last decade or so." The Financial Stability Review estimates the median borrower is able to cover over a year of scheduled mortgage payments from offset and redraw buffers. It also put the share of variable-rate owner-occupier borrowers whose income falls short of essential spending and loan payments at "around 2 per cent".

Why the Board kept going

Each of the four meetings was a judgement that inflation was not falling fast enough. Headline inflation was 3.9 per cent over the year to the June quarter, and the monthly CPI indicator showed 4.0 per cent for August. The trimmed mean, an underlying measure that smooths out the most volatile price movements, was 3.6 per cent in the June quarter, and Bullock described underlying inflation in September as "about 3.5 per cent". The target is a range of 2–3 per cent, with a midpoint of 2.5 per cent.

In September, the Board said some of the upside risks it had flagged in August were materialising, including higher global energy prices linked to a broader Middle East conflict, capacity pressures at home and firms raising or planning to raise prices. It judged that "a further tightening of financial conditions" was warranted.

The Board also noted that new housing loans had declined noticeably and housing prices had fallen in most capital cities, signs that the earlier increases are having an effect. Bullock cautioned that the full impact is still ahead: "A lot of that effect is still to flow through." She said it "can take 12, perhaps even 18 months" for policy changes to fully work through.

The bottom line

The four meetings of February, March, May and September each added a quarter of a percentage point to the cash rate, and for many variable-rate borrowers that has meant four separate increases in the monthly bill. On the RBA's own measures, the repayment burden is back near its 2024 peak as a share of income and, in Bullock's words, will "go up a bit further".

Whether a fifth meeting joins the list is unknown. Bullock said, "The Board will increase interest rates again if that's what's needed to get inflation down," but also, "I'm not going to give you forward guidance." The next decision is due at 2.30 pm on 3 November, following the September minutes on 13 October and the next CPI release on 28 October.