Big Four Banks Pass On Full RBA Rate Hike — What Variable Rate Borrowers Need to Know

Big Four Banks Pass On Full RBA Rate Hike — What Variable Rate Borrowers Need to Know

Australia's four major banks — CBA, Westpac, NAB, and ANZ — have all confirmed they will pass on the Reserve Bank of Australia's 25 basis point rate hike in full, effective this week. Mutual lenders followed suit. For borrowers on variable rate home loans, this means monthly repayments rise immediately.

What Changed on 17 March 2026

The RBA's Monetary Policy Board voted to raise the cash rate target by 25 basis points to 4.10% at its March 2026 meeting. Governor Michele Bullock stated in her press conference that the hike was driven by persistently strong domestic demand — not the global oil shock — and signalled the Board remains prepared to act further if inflation does not continue declining toward the 2–3% target band.

Within 24 hours, all Big Four banks announced corresponding increases to their variable mortgage rates, with most effective within days.

How Much More Will You Pay?

On a $750,000 variable loan over 25 years, a 25bp increase adds approximately $110–$120 per month to repayments. For borrowers already stretched after multiple hikes, cumulative increases since early 2022 are now running at over $1,500 per month compared to the pre-hike-cycle baseline.

Non-Bank Lenders: A Different Calculation

Unlike the Big Four banks, non-bank lenders are not required to follow the RBA cash rate mechanically. Their funding comes from institutional investors and RMBS markets rather than retail deposits, which means pricing decisions are made independently.

For borrowers with complex income situations — self-employed individuals, Alt Doc loan holders, or business owners — non-bank lenders like MPFG Capital have historically offered greater flexibility in how income is assessed and how rate changes are applied. Many non-bank products carry fixed or capped rate structures that provide certainty during rate-hike cycles.

What Should Borrowers Do Now?

If you are on a variable rate with one of the major banks, now is a good time to review your options:

• Refinance to a fixed or capped-rate product — especially if further hikes are expected before mid-2026
• Explore non-bank Alt Doc or Full Doc options — if your income is irregular or self-sourced, non-bank assessment criteria may offer a better fit
• Contact a broker — the mortgage broker market now handles over 70% of all new Australian home loan applications, and an accredited broker can compare over 40 lenders simultaneously

MPFG Capital works with self-employed borrowers, new migrants, and Chinese-Australian clients who may not qualify for standard bank products. Our Alt Doc and private funding solutions are designed to serve borrowers the major banks decline.

FAQ

Q: Will all lenders pass on the full RBA hike?

A: All Big Four banks and most mutual lenders have confirmed passing on the full 25bp. Non-bank lenders make independent pricing decisions and may not match the increase directly.

Q: How much has my monthly repayment increased since 2022?

A: On a $750,000 loan, cumulative rate hikes since early 2022 have added approximately $1,500–$1,700 per month in repayments, depending on your loan balance and term.

Q: Can I switch from a major bank to a non-bank lender?

A: Yes. Refinancing to a non-bank lender is a straightforward process. MPFG Capital can assess your eligibility and provide a comparison within 24–48 hours.

*This article is general information only and does not constitute financial advice. Loan eligibility and terms vary by individual circumstances.*