On 29 September the Reserve Bank lifted the cash rate target by 0.25 percentage points to 4.60%, effective 30 September. It is the fourth increase this year, after rises in February, March and May. If you own a home on the Central Coast, especially one with a mortgage, that is a fair reason to check your numbers. It is not a reason to panic, and nobody can tell you what happens next. What follows is what the RBA did, what it costs a typical borrower, where the experts disagree, and the questions I would ask before making any decision about selling.
Key points
- The RBA raised the cash rate by 0.25 points to 4.60% on 29 September, its fourth rise this year.
- Inflation was 4.0% in the year to August, and the RBA says it may raise rates further if needed.
- A quarter-point rise adds about $16 a month per $100,000 owed on a 30-year loan (my illustration).
- ANZ and Westpac expect another rise on 3 November; CBA and NAB expect a hold. The forecasters disagree.
The path so far
The cash rate started 2026 at 3.60%. The Reserve Bank has moved it four times:
- 3 February: up to 3.85%
- 17 March: up to 4.10%
- 5 May: up to 4.35%
- 29 September: up to 4.60%
It held the rate at its June and August meetings. In total, that is one full percentage point of increases in nine months. The RBA's statement said the Board may raise the cash rate further if needed and will watch the incoming data. The next Board meeting is 2 to 3 November, with the decision announced on 3 November.
Why the RBA is still raising
The Bureau of Statistics reported on 30 September that annual inflation reached 4.0% in August, up from 3.5% in July. The trimmed mean measure, which strips out the most volatile price changes and is the figure central banks watch most closely, was 3.6% and had been steady for three months. When inflation is running above the RBA's target, it raises the cost of borrowing to slow spending. That is the logic behind all four rises, and it is why the Bank has not ruled out a fifth.
What a rise does to repayments
Reports on 30 September and 1 October said the major lenders would pass the full 0.25 points on to variable-rate customers, with changes taking effect from about 9 October. Here is a rough guide. It is my own arithmetic, not bank advice, and it assumes a 30-year loan at rates around 6%:
- A quarter-point rise adds about $16 a month for every $100,000 owed. That is roughly $65 a month on a $400,000 loan, $97 on $600,000 and $130 on $800,000.
- If your rate moved by the full one percentage point this year, the extra is about $64 a month per $100,000. That is roughly $255 a month on $400,000, $383 on $600,000 and $510 on $800,000.
Your lender's actual figures will differ, because rates, loan terms and offset balances vary. Check your latest statement or ask your lender for the repayment at the new rate.
What it means for sellers
A seller with a mortgage is weighing two things at once: the cost of holding the home and the price a buyer will pay. Higher repayments make some owners want to sell. They also reduce what buyers can borrow, which is the other half of the same story.
What it means for buyers
Higher rates reduce what lenders will let people borrow. That narrows the group who can pay a given price, even when they like the home. It is why I price against what buyers can borrow today, not what they could have borrowed in March. A buyer who qualified for a loan in the first quarter may find the same loan application falls short now.
What the forecasters disagree about
In an economists' roundup dated 6 October, ANZ and Westpac expected another rise to 4.85% in November. CBA expected the RBA to hold, with a rise still possible, and NAB expected a hold with a rise as a risk. That split is the plain answer to "what happens next": the people paid to forecast it disagree. Any article that tells you with certainty that rates will fall or rise is guessing.
Four questions before you decide anything
- Could I carry my loan comfortably if rates rose another quarter of a point? Work out the repayment at 0.25 and 0.50 points higher, and check it against your budget.
- Do I have a reason to sell that has nothing to do with interest rates? Family, work, health and downsizing are all good reasons. Fear of the next headline is not.
- What would I buy next, and what does it cost at today's rates? If you are selling to buy, the sale price is only half the arithmetic.
- What does the evidence say about my home? That means comparable sales, and what buyers can choose from now, not a suburb median.
Terms worth knowing
- Cash rate: the interest rate on overnight loans between banks, set by the RBA. Lenders use it as a reference point when setting their own rates.
- Variable rate: a loan rate your lender can change, usually after a cash rate move.
- Fixed rate: a rate locked for a set term, so it does not change until the term ends.
- Trimmed mean inflation: a measure that leaves out the biggest price swings, so it shows the underlying trend.
What the rise does not mean
It does not mean prices will fall by a set amount, and it does not mean you should sell or hold. Rates are one influence on prices among many, including supply, employment, population growth and buyer confidence. Sydney values are down 7.0% over 12 months, while the northern Central Coast figure I found was still up 1.3%. Markets can behave very differently at the same time.
Questions owners ask
Will my repayments go up automatically?
If you are on a variable rate, your lender will adjust it and should notify you. If you are on a fixed rate, your repayments do not change until the fixed term ends.
Should I fix now?
I am not a lender or financial adviser, so I cannot tell you. A mortgage broker can compare current fixed and variable options for your situation.
Does a rate rise mean I should sell before prices fall?
Not by itself. Work through the four questions above and get evidence for your home first.
How I approach it
I spent more than 20 years in sales and negotiation before moving into residential real estate. The principle I take from that work is to start with what the other side can actually do, not what I would like them to do. In this market that means pricing against current buyer budgets, preparing the home so it holds up to a second look, and keeping a clear line on price when offers come in below it. None of that depends on guessing where rates go next.
A short checklist for this week
- Find your current loan balance, rate and remaining term.
- Ask your lender for your repayment at the new rate, and at 0.25 points higher.
- If your fixed rate ends in the next 12 months, ask what rate you would roll onto.
- Write one sentence on why you might sell. If you cannot, you may not need to decide yet.
- If you want to know where your home stands, request an appraisal. It costs nothing and carries no obligation.
Rate decisions will keep coming, and no one controls them. What you can control is knowing where your property stands before you decide anything. You can request a free appraisal, see the Central Coast suburb reports, or read the sell now or wait checklist.
Find out where your property sits now