What a rate change means for your repayment — Value Lending
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Rate changes

What a rate change means for your repayment

A move in the cash rate reaches a home loan as a change to the repayment, and the size of that change is predictable. This page keeps the current setting, works the arithmetic for your loan, and sets out what does and does not change for different borrowers.

The current setting

Cash rate target4.85%from 4 November 2026
Last decision3 November 2026up 0.25 percentage points from 4.60%
Next decision8 December 20262:30pm Sydney time
SourceReserve Bankrba.gov.au · checked 10 November 2026

The cash rate is the rate on overnight lending between banks. Lenders set their own home loan rates and decide separately whether, when and by how much to pass a change on. This page does not forecast rates.

How the cash rate has moved

0%1%2%3%4%5%201920202021202220232024202520264.85%

Cash rate target at each change since 2019, on the date it took effect. Source: Reserve Bank of Australia cash rate target table. The chart is a record, not a forecast.

EffectiveRateChange
4 November 20264.85%+0.25
30 September 20264.60%+0.25
6 May 20264.35%+0.25
18 March 20264.10%+0.25
4 February 20263.85%+0.25
13 August 20253.60%−0.25
21 May 20253.85%−0.25
19 February 20254.10%−0.25
8 November 20234.35%+0.25
7 June 20234.10%+0.25

What a 0.25 point move does to your repayment

Enter the loan and the rate you actually pay. The figures show the monthly principal-and-interest repayment at that rate, and at 0.25 percentage points above and below it.

0.25 lower—per month
At your rate—per month
0.25 higher—per month

The rate pre-filled is an example for the arithmetic, not a rate on offer. Repayments assume monthly principal and interest over the years entered; interest-only and offset balances change the figures.

Common loan sizes at the rate entered

LoanMonthly nowChange per 0.25 ptChange per 0.50 ptPer 0.25 pt, each year

What actually changes

Variable rate borrowers. The lender announces its own change, usually with an effective date two to three weeks after the Reserve Bank's decision, and the repayment moves from the next cycle after that. Some lenders leave the direct-debit amount where it is after a decrease and let the loan run ahead; it is worth checking which has happened on your account.

Fixed rate borrowers. Nothing changes until the fixed term ends. What matters is the variable rate you will roll to on that date, which is set then, not now. The refinance calculator shows what the roll-off looks like against alternatives.

New borrowers and anyone being reassessed. Lenders assess serviceability at a buffer above the rate you would pay, so a 0.25 point move in the actual rate moves the assessment rate by the same amount. On a typical application that is a few thousand dollars of borrowing capacity for every $100,000 of income; the borrowing capacity calculator shows the effect for your figures.

Investors. The repayment change lands against rental income that moves on its own timetable. The investment property calculator shows the weekly holding cost before and after a rate change.

If the repayment has changed

The calm sequence is: confirm your lender's new rate and the date it applies; check the repayment against the figure above; if the loan is variable and the rate now sits well above what the same lender offers new customers, that gap is a reason to ask, and a reason to compare. If the budget is tight after the change, a longer remaining term or a period of interest-only are structures a lender will consider on a conversation, and it is a better conversation before a payment is missed than after.

Understanding how a rate change reaches your loan, before the next decision rather than after it, puts you in a better position.

Rate change notes

A plain note the morning after each decision

What moved, what it does to the repayment on common loan sizes, and what changes for fixed, variable and new borrowers. Eight times a year, nothing else.

General information only; it does not take your circumstances into account and is not credit or financial advice. Lender rates and policies vary and change. Value Lending Pty Ltd is a Corporate Credit Representative (515167) of Connective Credit Services Pty Ltd (ACL 389328).