This is an archived update from September 2026. For the current cash rate and the most recent decision, see our rate updates page.
- Cash rate: 4.60%
- Decision: increased by 0.25%, unanimous
- Announced: 29 September 2026
What the Board decided
The Reserve Bank increased the cash rate by 0.25% to 4.60% on 29 September 2026, and the decision was unanimous. It was the fourth increase of the year, it took the cash rate up by a full 1% since January, and it was the highest the cash rate had been since late 2011.
The Board said inflation remained elevated and that the upside risks it had flagged in August were materialising. The conflict in the Middle East had broadened and global energy prices were much higher than the Reserve Bank assumed when it published its August forecasts. Higher fuel prices had started to feed through into the prices of other goods and services. Demand driven by artificial intelligence was pushing up global prices for technology goods, and businesses were reporting cost pressures that they were either passing on or looking to pass on.
The Board acknowledged that its three earlier increases had tightened conditions and that the economy appeared to be slowing, with housing prices falling in most capital cities and new home loans down noticeably. Its judgement was that inflation was still too high and a further tightening was warranted. The statement repeated that the Board would raise the cash rate again if it needed to, and five weeks later it did.
What the economists said
Almost nobody was caught out. A Reuters poll found 33 of 34 economists expecting the increase, all four major banks had forecast it, and financial markets had it around 90% priced on the morning of the meeting. CBA, Westpac and ANZ all brought their calls forward from November during September, mostly on higher oil prices and on how senior Reserve Bank officials spoke at a parliamentary hearing on 18 September.
The argument at the time was about November. ANZ expected a fifth increase on Melbourne Cup Day, which would take the cash rate to 4.85%. CBA had 4.60% as the peak in its base case, but flagged a follow up if the next quarterly inflation figures came in hot. NAB and Westpac both described another increase as a risk rather than their base case. In Finder’s survey, 48% of experts expected one more rise before the end of the year. ANZ turned out to be right.
Here is what that increase looked like on a $600,000 loan with 25 years left to run, going from a rate of 6.25% to 6.50%.
- Repayment before: $3,958 a month
- Repayment after: $4,051 a month
- Difference: $93 a month, or about $1,120 a year
On how that landed, EY Oceania chief economist Cherelle Murphy said the fourth increase would hurt many households, but that from the Reserve Bank’s point of view, inflation staying too high hurts more.
Our broker’s take
Chief executive and founder of mortgage broker Well Money, Scott Spencer, said this increase would be felt more than the three earlier ones. “The first few this year came off a lower base and a lot of people absorbed them without changing much. This is the fourth, the cash rate is the highest it has been in 15 years, and for plenty of households the buffer they had in January has gone.”
His advice was to work out the actual number rather than wait for it. “Your lender will write to you with the new rate and the date it starts, usually a few weeks away. Do not wait for the first higher repayment to land to find out what it is. Work it out now, because if it is going to be tight, that is a much better conversation to have early.”
He said a rising market is exactly when it pays to look around. “The gap between what new customers are offered and what existing customers pay gets wider every time rates move. Competition between lenders is still strong and there are good options out there, but nobody is going to ring you up and offer you a better rate. You have to go and ask for it.”
That is the part we do for a living. We are mortgage brokers, so we compare across a panel of bank and non-bank lenders, and we know how each one reads a file. Call us on 1300 899 724 or book a time to talk it through.