Budget against the rate you will actually be charged, not 4.35 per cent. The RBA’s July 2026 lenders’ rates put new owner-occupier loans at 6.24 per cent, add the lender’s fees, then prove the repayment still works 0.25 points higher.[4]
That is what a 4.35% cash rate means for home loan repayments in practice, and the rest of this piece walks the questions in the order a borrower asks them. Where the cash rate sits today and when it next moves. Why your loan is nearly two points above it. What each 0.25 point rise costs per $100,000 borrowed. How far rates moved in 2026, whether interest-only is real relief, which fees belong on top of the advertised rate, whether your repayment survives one more rise, and what a falling market changes.
All rates and fees here were checked on 18 September 2026, eleven days before the next Monetary Policy Board decision. This is an editorial synthesis of published figures from the Reserve Bank of Australia, the Australian Bureau of Statistics, Cotality and CommBank’s own rates page. We have not tested any lender’s product, and none of this is personal financial advice.
What is the RBA cash rate right now, and when does it next change?
The cash rate target is 4.35 per cent, effective 6 May 2026, after the third 0.25 percentage point rise of the year.[1] The Board then left it alone at the June and August meetings, effective 17 June and 12 August.[1]
The next decision lands on 29 September 2026. The RBA’s release schedule has the post-meeting Chart Pack due 30 September and the minutes on 13 October, which pins the meeting date.[6]
A few dates after that are worth writing down, because they are when the picture next changes. ABS August monthly CPI on 30 September, the Financial Stability Review on 1 October, and the next Statement on Monetary Policy on 3 November 2026.[6]
The RBA has not committed to a direction. So the fortnight before 29 September is a pricing problem, not a forecasting one.
If the cash rate is 4.35 per cent, why is my home loan over 6 per cent?
Lenders price above the cash rate. The RBA’s lenders’ rates series for July 2026 puts outstanding owner-occupier housing loans at 6.21 per cent per annum and new owner-occupier loans at 6.24 per cent, against a 4.35 per cent cash rate target held since 6 May 2026.[4]
The same series shows the gap holds across every other product. Investor loans averaged 6.44 per cent on outstanding balances and 6.41 per cent on new lending, while small business loans sat at 7.46 per cent outstanding and 7.44 per cent new, all measured in July 2026 by the RBA using APRA data.[4]
So 4.35 per cent is a policy target nobody is charged. A household budget built on it understates the interest rate by roughly 1.9 percentage points, which on a $600,000 balance is the difference between a repayment you can carry and one you cannot.
How much does each 0.25 percentage point rise add per $100,000 borrowed?
Here is the arithmetic, run by SleekDrops rather than lifted from a lender’s calculator. Inputs: $100,000, a 30-year term, principal and interest, starting at the 6.24 per cent average the RBA reported for new owner-occupier loans in July 2026.[4]
At 6.24 per cent the monthly repayment is about $615. At 6.49 per cent it is about $631.
That is roughly $16 a month, or about $196 a year, for every $100,000 borrowed, for one 0.25 point move. The figures are indicative, because lenders round and compound on their own schedules.
Scale it by your balance and the number stops being small. On $600,000 a single 0.25 point rise is about $98 a month, and the three rises of 2026 together add somewhere near $49 a month per $100,000, or close to $294 a month on that same $600,000 loan.
Run your own balance through those two lines before anyone quotes you a monthly figure across a desk.
How much did Australian rates actually rise in 2026?
The target went from 3.60 to 3.85 per cent effective 4 February, to 4.10 per cent effective 18 March, and to 4.35 per cent effective 6 May.[1] That is 0.75 percentage points in just over three months, followed by holds effective 17 June and 12 August.[1]
The August 2026 Statement on Monetary Policy says inflation is still too high and is not expected back to the middle of the 2-3 per cent target range until early 2028, and that spending in the economy will need to slow.[3] It also notes the increases from earlier in the year are yet to have their full effect.[3]
The price data is easing rather than solved. ABS monthly CPI rose 3.5 per cent in the year to July 2026, down from 3.8 per cent to June, with trimmed mean inflation unchanged at 3.6 per cent and housing the largest contributor at 5.0 per cent.[5] Annual CPI peaked at 4.6 per cent in March 2026 before easing through April to July.[5]
A variable rate signed this month sits inside a cycle the RBA says has further to run. That is why the stress test below is not optional.
Is interest-only a safe way to cut repayments while rates are high?
No, and the premium is printed in the RBA’s own data. New interest-only owner-occupier loans averaged 6.98 per cent per annum in July 2026 against 6.16 per cent for new principal-and-interest loans, a gap of 0.82 percentage points.[4]
You pay 0.82 points more for the product sold as breathing room. On $500,000 that premium alone is roughly $4,100 a year in extra interest.
The second cost is structural. Nothing comes off the balance during the interest-only period, so the next rise applies to the same principal you started with.
The third cost is the failure mode. CommBank’s home loan rates page states that when an interest-only period ends, repayments are recalculated as principal and interest at then-current rates over a shorter remaining term, so the monthly amount steps up sharply.[7] A principal-and-interest loan with an offset account does the same cash-flow job without the rate premium, provided you count the offset fee, which the next section prices.
What fees should you add to the advertised rate before you sign?
CommBank publishes its numbers, so use them as the worked example. Checked on its home loan rates page on 18 September 2026: a $300 establishment fee, a $20 monthly loan service fee, and a $10 monthly offset feature fee per linked Everyday Offset arrangement.[7]
That is $360 a year in ongoing fees, and it keeps running whatever the cash rate does.
Now price the discount against it. CommBank advertises at least 0.10 per cent p.a. off for customers who start online on eligible Simple and Standard Variable Rate home loans, with a $150,000 minimum loan balance.[7] By our calculation, 0.10 per cent recovers $360 a year only at a balance of about $360,000. Below that, the fee-bearing package with the discount attached costs more than a variable loan with no monthly fee.
There is a second string on the Digi Home Loan: a Qantas points offer for applications lodged online by 30 September 2026 and settled by 31 December 2026.[7] That is a deadline, not a rate.
Before you sign, read six things off the lender’s page: comparison rate, establishment fee, monthly service fee, offset fee, minimum balance, and what the discount is conditional on. These figures are CommBank’s because CommBank publishes them. Every other lender’s have to be read off their own page on the day.
Can your repayment survive one more 0.25 point rise?
Three steps, ten minutes. Price the loan at the rate the lender is advertising today, add the annualised fees from above, then add 0.25 percentage points and check the household is still solvent.
Use the numbers already established: about $16 a month more per $100,000, plus $360 a year of fees if the package carries them. On a $500,000 loan that test is roughly $82 a month extra, on top of about $30 a month of fees.
The RBA expects inflation back at the middle of the target only in early 2028, so a second test at 0.50 points costs you ten more seconds and is worth running.[3] CommBank flags the trade-off on its own variable products in plain words: “Not protected from interest rate increases”.[7] Variable borrowers absorbed three separate 0.25 point rises between February and May 2026.[1]
Fixing buys certainty, not a forecast. The RBA has not signalled a direction, and neither will we.
Does a falling market change the maths on borrowing more?
Cotality reported that 93 per cent of capital city suburbs recorded value falls over winter 2026, with resale profits retreating from record levels.[8] The RBA’s August statement also notes housing prices have declined noticeably and that unemployment has risen a little and is expected to keep rising gradually.[3]
Supply is thin. Cotality reported on 6 September 2026 that spring listing volumes opened 31 per cent down on the same period last year, while the combined capitals auction clearance rate reached 58.5 per cent in the week to 13 September 2026, its strongest in 19 weeks after 52.4 per cent in late August.[9]
Lower entry prices, slower exit. Anyone financing a purchase they expect to resell inside a year has to cover stamp duty and agent commission out of a falling base, which a longer hold or a larger deposit fixes and a cheap headline rate does not.
Which loan answers which question
Filed by the question each one settles, not ranked. Only CommBank is named here because it publishes these fees and conditions on its own page, checked 18 September 2026.[7]
| Product | The question it answers | What it costs to hold | The catch |
|---|---|---|---|
| CommBank Simple Home Loan | Do the fees eat the discount? | $300 establishment, $20/month service, plus $10/month with an Everyday Offset linked[7] | The 0.10 per cent online discount needs a $150,000 minimum balance and only clears $360 a year of fees above roughly $360,000[7] |
| CommBank Standard Variable Rate home loan | Can I absorb another rise? | Same online discount on eligible applications[7] | The product page prints “Not protected from interest rate increases”; run the 0.25 point test on this one[7] |
| CommBank Digi Home Loan | Is this a rate or a promotion? | Qantas points offer, applications lodged online by 30 September 2026, settled by 31 December 2026[7] | A deadline, not a rate advantage |
| Interest-only owner-occupier loans (category) | Can I just lower this month’s payment? | 6.98 per cent average on new lending, July 2026[4] | 0.82 points above principal and interest, no principal cleared, and a recalculated repayment when the term ends[7] |
So what should you actually sign before 29 September?
Sign the principal-and-interest variable loan you can afford at 6.5 per cent, not 4.35. If a $20 monthly fee buys an offset you will actually fund, keep it; if it does not, take the no-fee loan and reject interest-only.
What a 4.35% cash rate means for home loan repayments is arithmetic you do at about 6.2 per cent, which is where the RBA says borrowers sit.[4] Add the establishment and monthly fees off the lender’s own page, prove the repayment still works 0.25 points higher, and treat interest-only as a 0.82 point premium that clears nothing off the balance.
Rates and fees checked 18 September 2026. Cash rate target 4.35 per cent, next decision 29 September 2026.
