How RBA Rate Moves Flow Through to Your Mortgage Repayments
The Reserve Bank of Australia's 2026 cash rate decision affects variable-rate home loans. When the cash rate changes, lenders typically adjust the interest rate on variable mortgages, which changes the monthly repayment amount. The exact impact depends on your loan balance and how much rates shift.
Calculating the Impact on Different Loan Amounts
To see how a rate change affects your repayments, consider these examples for a 30-year variable mortgage:
- $500,000 loan: A 0.25% rate change (from 6.00% to 5.75%) reduces the monthly repayment by about $82. A 0.50% change (from 6.00% to 5.50%) reduces it by about $165.
- $750,000 loan: A 0.25% rate change from 6.00% to 5.75% lowers the monthly payment by around $123. A 0.50% drop to 5.50% saves about $247 each month.
- $1,000,000 loan: At 6.00%, the monthly repayment is about $6,000. If the rate falls to 5.75%, the payment drops to about $5,836, a saving of about $164. At 5.50%, it falls to about $5,678, saving roughly $322.
These figures are illustrative. The actual repayment change depends on your specific loan terms and the lender's response to the RBA decision.
What This Means for You
A lower cash rate can reduce your monthly mortgage outgoings, freeing up cash flow. If you have a variable-rate loan, it's worth monitoring your lender's announcements after each RBA meeting. Any change to your repayment amount will be reflected in your next loan statement.