The short answer
The Reserve Bank lifted the cash rate three times in 2026 – in February, March and May – taking it from 3.60% up to 4.35%, before holding steady at its June meeting. For a Lismore homeowner with a typical $500,000 variable home loan, that run of increases has added somewhere in the order of $230 to $250 a month to repayments, depending on how quickly your lender passed each rise on.
If you haven’t looked at your loan since the first of those three rises, this is worth five minutes of your time.
What actually happened to rates this year
Three consecutive 25-basis-point increases lifted the cash rate by a combined 0.75 percentage points across February, March and May. The Reserve Bank’s reasoning held steady through all three: inflation is still running above its 2–3% target band, sitting at 4.2% in April, and the trimmed mean – the measure the Bank watches most closely – actually edged up to 3.4%. Higher fuel and commodity prices tied to disruption in the Middle East added extra pressure on top of existing domestic demand.
At its June meeting, the Board paused. Financial conditions had tightened enough from the three earlier moves that it made sense to wait and see how households responded, rather than push further while the full effect was still working through the economy. The pause was unanimous, but it wasn’t a signal that the Bank is finished. Governor Michele Bullock has described the current 4.35% rate as ‘a bit restrictive’ – RBA language for watching closely, not backing off.
What three rate rises actually cost on a typical loan
Take a $500,000 loan over 30 years. At a rate around 5.50%, monthly repayments sit close to $2,840. Move that same loan to 6.25% – roughly where the average new owner-occupier variable rate sits after this year’s increases – and repayments climb to around $3,080. That’s an extra $240 a month, or close to $2,900 a year, for no reason other than three Reserve Bank decisions you had no say in.
Most lenders, including the regional and customer-owned banks a lot of our Northern Rivers households deal with, passed each 0.25 percentage point rise on to variable borrowers in full, usually within a few weeks of the announcement. If your repayments haven’t moved accordingly, it’s worth finding out why, i.e. is it a fixed rate term shielding you for now, in which case you’ll want to understand when the fixed term expires.
Why the RBA paused, and what might come next
Economists don’t agree on what happens at the next meeting, on 11 August. Westpac is still forecasting two further 25-basis-point increases this year, which would take the cash rate to 4.85%. NAB and ANZ expect the Bank to hold through the rest of 2026 and start cutting in 2027. All we know for sure is that nobody actually knows which way this goes next, which is a good argument for reviewing your position now, rather than waiting for the next RBA decision.
What this actually means for you
None of this is really about predicting the next RBA decision. It’s about whether your loan, as it stands today, is still doing its job.
A few things worth checking:
- Whether your current rate is in line with what your lender is offering new customers. Banks routinely price new business more competitively than they reprice existing loans – sometimes called the ‘loyalty tax’ – and the gap tends to widen the longer a loan’s been left untouched.
- Whether rising property values in the Northern Rivers have shifted your loan-to-value ratio enough to remove lenders mortgage insurance or move you into a better rate tier.
- Whether, given the genuine uncertainty about August and beyond, splitting part of your loan to a fixed interest rate makes sense for your situation.
- Whether refinancing costs – discharge fees, new application costs – are actually smaller than what you’d save over the next two or three years. They usually are, but it’s worth running the numbers rather than assuming.
Frequently asked questions
What is the RBA cash rate right now?
4.35%, following three 0.25 percentage point increases in February, March and May 2026, and a hold at the June meeting.
When does the RBA meet next?
11 August 2026. Economists are divided on whether that meeting brings another increase, a hold, or the first signal toward a 2027 cut.
Will my bank automatically give me a better rate if I’ve been a loyal customer for years?
Rarely. Lenders generally price more competitively for new customers than for existing ones, which is exactly why it pays to check your rate against the current market every twelve months or so, rather than assume loyalty is rewarded.
Is it worth refinancing while rates are still relatively high?
Often, yes. Refinancing isn’t only about timing the bottom of a rate cycle. It’s about whether your current loan still suits your situation, your equity position and what’s available elsewhere right now, and those factors don’t disappear just because rates are higher than they were a few years ago.
Worth a closer look?
A Smik Home Loan Health Check takes a few minutes and clearly tells you whether your current loan is still competitive. If it isn’t, we’ll talk you through what’s worth changing – whether it’s refinancing to another lender, or repricing your loan with your existing lender.
