The RBA lifted rates to 4.60%. Here’s what it means for owners, renters and small business.

At 2:30pm today, Tuesday 29 September 2026, the RBA raised the cash rate by 25 basis points to 4.60%. It is the fourth rise this year and takes the cash rate to its highest level in about 15 years.

That is a real cost for a lot of households, and there is no point pretending otherwise. It is also a manageable one for most, and the difference usually comes down to one thing: whether you know your own numbers before the new repayment lands. So let’s go through it properly. What happened, what it does to owners, renters and local business, and what it means for the economy around all three.

What happened, and why

After holding at 4.35% in July and August, the RBA’s Monetary Policy Board decided the pause had run its course. The official statement gives four reasons, and they are worth reading in plain English:

• Energy. The conflict in the Middle East has broadened, and global energy prices are now much higher than the RBA assumed when it made its August forecasts. Fuel feeds into almost everything, because almost everything has to be moved somewhere.
• Technology prices. AI-related demand is pushing up global prices for technology goods.
• Business costs. The RBA’s conversations with firms show they are facing cost pressures and are either raising prices or planning to.
• Recent data. Inflation in Australia came in stronger than the board expected in August.

The numbers behind it: annual inflation was 3.5% in the year to July, and the trimmed mean, the measure the RBA steers by, sat at 3.6% for a second month. Both are still above the 2% to 3% target band. The board’s judgement is that inflation will not come back to target in a reasonable time without a little more pressure.

If you want the mechanism behind all this, our August post on the hold explains what the RBA is and how the cash rate reaches your bank in about ninety seconds.

Home owners: what it adds to a repayment

Most lenders pass a cash rate rise on to variable borrowers within a few weeks, and your bank will write to you with the new figure and the date it starts. Until then, here is the maths on a 30-year principal and interest loan, using an illustrative variable rate of 6.00% moving to 6.25%.

Loan balance	Before (6.00%)	After (6.25%)	Monthly change	Change since January (5.25%)
$500,000	$2,998	$3,079	about $81	about $318
$750,000	$4,497	$4,618	about $121	about $476
$1,000,000	$5,996	$6,157	about $162	about $635

Two things in that table matter more than the headline.

The first is the right-hand column. The cash rate has gone from 3.60% at the start of the year to 4.60%, a full percentage point. Any single rise looks modest. Four in a row add up to a number that deserves a line of its own in your budget.

The second is that these are illustrative. Your rate, your remaining term and your offset balance change the answer, sometimes a lot. The Funance mortgage scenario calculator lets you put in your actual balance, rate and term and see your own figure, plus what another 0.25% up or down would do. It takes about two minutes and needs no account.

Fixed rate? Nothing changes until your fixed term ends. The useful question is what the variable rate will look like on the day it does, because that is the number you will roll onto.

Renters: slower, and less direct

A rate rise does not change your rent tomorrow. Your lease is your lease. But it does reach renters, just through a longer path.

Landlords with investment loans see their repayments rise in the same way owner-occupiers do. When a lease comes up for renewal, those higher holding costs are one of the things that feed into what a landlord asks for, alongside vacancy rates and what similar places are going for nearby. In a tight rental market, more of that cost tends to get passed through. In a looser one, less of it does.

So the honest version is: no immediate change, possibly some pressure at your next renewal, and it depends heavily on your local market. The part that helps directly is the other side of the ledger. If you are saving for a deposit, a higher cash rate usually means higher savings and term deposit rates, and it is worth checking your account has actually moved up with it.

Local business: two sides of the same squeeze

For small businesses, a rate rise lands twice.

Directly, through borrowing. Business overdrafts, equipment finance and variable business loans are mostly priced off the same rates, so the cost of carrying debt goes up. A business that borrows to buy stock ahead of a busy season, or runs on an overdraft between invoices, feels it in the monthly interest bill.

Indirectly, through customers. This is the bigger one for most local businesses. Every household paying about $120 a month more on a mortgage has $120 less for the café, the hairdresser, the tradie and the local shop. That is not a side effect of rate rises, it is the intended mechanism. The RBA is deliberately slowing spending so that businesses find it harder to keep lifting prices.

That is uncomfortable to say plainly, but it is how it works. The businesses that tend to handle it well are the same as the households that do: they know their fixed costs, they know how much cash buffer they have in months, and they have thought about what a quieter quarter looks like before it arrives.

The broader economy: what the RBA is trying to do

Step back and the picture is a balancing act rather than a crisis.

On one side, inflation is still above target and the new pressures are mostly coming from overseas: energy prices and global technology demand. The RBA cannot fix an oil supply problem, but it can stop higher fuel costs turning into a general habit of price rises across the economy. That is what this rise is aimed at.

On the other side, the job market is softening. Unemployment rose to 4.6% in August, and the tool that brings inflation down is the same tool that slows hiring. The RBA knows this, which is why it paused for two meetings before moving again, and why each decision is being weighed meeting by meeting rather than set on a path.

What it means in practice: spending slows, some sectors (retail, hospitality, construction) feel it first, and prices should rise more slowly over the next year than they otherwise would. None of that is a prediction of a recession. It is the ordinary, uncomfortable part of the cycle, and rate cycles do run in both directions. The next decision is on 3 November 2026, when the RBA also publishes new forecasts.

Why a budget matters more on days like this

The headline will be everywhere tonight. What nobody on the news can tell you is what 4.60% means for your household, because that depends on things only you know: your balance, your rate, what comes in, what goes out, and how much room there is between them.

That gap is the whole game. A household that knows it has $600 a month of breathing room reads today’s news as a line item. A household that has never worked it out reads it as a threat, even if its position is exactly the same. The difference is not income. It is visibility.

A few things that tend to help, whichever group you are in:

• Know your new number before it arrives. Run your loan through the mortgage scenario calculator so the letter from your bank confirms something you already know.
• Find your break point. Not “can I afford today”, but “at what rate does this stop working”. Knowing that turns each RBA decision from anxiety into information.
• Look at recurring costs first. Subscriptions, insurance and energy plans are where most households find money without changing how they live. Our post on the subscription trap is a good place to start.
• Keep a buffer, in months not dollars. Whether it sits in an offset, a savings account or a business account, knowing how many months of costs you could cover is the most calming number there is.

How Funance helps

This is the moment Funance was built for. Not to predict the RBA, nobody can do that reliably, but to make sure the decision lands on a plan rather than a guess.

• The Budget tab shows where your money actually goes each month, in categories that match your life, so you can see where an extra $120 or so would come from.
• The Debts tab (free) models your real loan at your real rate, including what an extra repayment does to your payoff date.
• The Scenarios tab (Pro) lets you run rates up and down side by side, so November’s decision is a number you have already seen, whichever way it goes.
• The Subscriptions tab (Pro) finds the recurring costs you have stopped noticing.

Stay calm, run your numbers, and plan from what you know rather than what the headlines say. The cash rate is out of your hands. Your next month’s plan is not.

This post is general information about a public monetary policy decision. It is not personal financial advice, and I’m not a licensed adviser. For your own situation, talk to a mortgage broker or a licensed financial adviser.