How Much Will Repayments Rise After the RBA Hike to 4.60%? A September 2026 Guide for Self-Employed and Chinese-Australian Borrowers

Key Takeaway (as at 29 September 2026): The RBA raised the cash rate by 0.25 percentage points to 4.60% on 29 September 2026, the highest level since 2011 and its fourth hike this year. On a $750,000 30-year loan, a full pass-through adds about $124 a month. Bank borrowing capacity also shrinks by about 2%, and self-employed borrowers are likely to feel that change first.

What Did the RBA Decide on 29 September 2026?

The Reserve Bank of Australia's Monetary Policy Board unanimously lifted the cash rate target from 4.35% to 4.60%, effective 30 September 2026. It is the fourth 25-basis-point increase of 2026 and takes the cash rate to its highest level since November 2011.

The Board said that "inflation remains elevated and some of the upside risks flagged in August are materialising." It pointed to three pressures:

Energy: the Middle East conflict has broadened, and global energy prices are "much higher" than assumed in the August forecasts. Higher fuel costs are already feeding into other prices.
Technology goods: AI-related demand is pushing up global prices for technology-related goods.
Domestic demand: growth slowed but was stronger than expected in the June quarter, and business investment and debt are growing strongly.

The Board also kept the door open to further moves. It will do "what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed."

After four hikes in 2026, the RBA cash rate sits at 4.60%, a full percentage point above where it started the year.

The 2026 Rate Path at a Glance

Effective date	Change	Cash rate
13 Aug 2025	−0.25	3.60%
4 Feb 2026	+0.25	3.85%
18 Mar 2026	+0.25	4.10%
6 May 2026	+0.25	4.35%
30 Sep 2026	+0.25	4.60%

Source: RBA cash rate target history, September 2026.

Why Did the RBA Raise Rates Again?

The RBA raised rates because inflation is still well above its 2–3% target band, and the energy shock is making the problem worse rather than better. Four data points explain the decision:

Indicator	Latest reading	Source
Headline CPI (12 months to July 2026)	3.5% (down from 3.8% in June)	ABS
Trimmed mean CPI (12 months to July 2026)	3.6% (unchanged)	ABS
Unemployment rate (August 2026)	4.6% (up from 4.5%)	ABS
National home values (August 2026)	−0.9% for the month; −3.6% from the March peak	Cotality

The unemployment rate has risen and home values are falling, but underlying inflation has held at 3.6%. The Board judged that the risk of inflation becoming entrenched outweighed the risk of a sharper slowdown. At the press conference, Governor Michele Bullock said a recession "is not our central base case at this point."

Underlying inflation of 3.6% is the number that moved the RBA, not the 4.6% unemployment rate.

How Much Will My Mortgage Repayments Increase?

If your lender passes on the full 0.25% increase, repayments on a 30-year principal-and-interest loan rise by roughly $165 per month for every $1 million borrowed. Interest-only borrowers pay about $208 more per month per $1 million.

The table below assumes a variable rate moving from 6.50% to 6.75%. Your actual rate will differ.

Loan balance	Monthly P&I before	Monthly P&I after	Increase from this hike	Increase since Jan 2026 (+1.00%)
$500,000	~$3,160	~$3,243	~$83	~$325
$750,000	~$4,741	~$4,864	~$124	~$488
$1,000,000	~$6,321	~$6,486	~$165	~$650
$1,500,000	~$9,481	~$9,729	~$248	~$975
$2,000,000	~$12,641	~$12,972	~$331	~$1,301

Illustrative calculations by MPFG Capital. Assumes a 30-year P&I loan with the full rate change passed on. Not a quote.

When Will the Increase Hit?

Lenders set their own timing. Macquarie Bank confirmed it will pass on the full 0.25% to variable home-loan borrowers from 15 October 2026 (ABC News, 29 September 2026). The major banks have historically passed on RBA hikes in full within about two weeks. Check your lender's notice for the exact date.

A 0.25% rate rise costs about $165 a month for every $1 million of a 30-year home loan.

How Does the Hike Affect Borrowing Capacity?

Each RBA hike reduces what banks will lend, because APRA requires them to test your repayments at 3 percentage points above the loan rate. At a 6.75% loan rate, a bank assesses you at about 9.75%.

Using the same monthly surplus in each case:

A borrower who qualified for $800,000 before this hike now qualifies for about $783,000, about 2% less.
Compared with January 2026, when the assessment rate was about 8.75%, the same borrower's capacity has fallen from about $855,000, a drop of roughly 8.4%.

Illustrative calculations by MPFG Capital. Actual capacity depends on income, expenses, dependants and lender policy.

Why Self-Employed Borrowers Feel It First

Self-employed borrowers are usually closest to the serviceability limit. Banks often use the lower of the last two years' taxable income, may exclude add-backs, and apply the same 3% buffer. A borrower who only just passed in May 2026 may now fail the same test at the same income.

This matters most for:

Restaurant and café owners whose tax returns show lower income than their business turnover
Business owners in their first two years, whose bank-eligible income history is still short
New migrants and PR holders with limited Australian credit or employment history

For self-employed borrowers, the real impact of a rate hike is often a bank rejection, not a higher repayment.

What Should Borrowers Do Now?

Before your lender's new rate takes effect, stress-test your budget, review your loan structure and confirm what you can still borrow. Five practical steps:

Check your lender's notice. Confirm the new rate and effective date, and whether your minimum repayment changes automatically.
Maximise your offset balance. At 6.75%, every $100,000 in an offset account saves about $6,750 a year in interest.
Ask for a rate review. Existing customers often pay more than new customers. Ask your lender to match its current new-customer rate.
Re-check your borrowing capacity before you make an offer. A pre-approval issued before 29 September may now be based on an outdated assessment. Confirm it before you bid.
Consider an Alt Doc pathway if the bank says no. A non-bank Alt Doc loan can assess income using BAS statements, business bank statements or an accountant's letter instead of two years of tax returns.

Is Refinancing Still Worth It?

Refinancing can still save money, but switching costs and a stricter assessment rate reduce the benefit. A refinance usually makes sense if the rate difference is meaningful, your fixed term has ended, or you need to consolidate higher-interest debt. MPFG Easy Refi is a non-bank refinance option for loans of up to $7.5 million.

Rising rates make one question more important: can you still borrow, and through which lender?

Will the RBA Raise Rates Again in 2026?

Most economists expect 4.60% to be the peak, but the view is not unanimous. Before the decision, CBA, NAB and Westpac saw 4.60% as the likely peak and described further hikes as a risk. ANZ forecasts one more 25-basis-point hike in November 2026, which would take the cash rate to 4.85%.

The key data point is the September-quarter CPI in late October. CBA has said a quarterly trimmed mean result of 1% or higher could trigger another hike. These are forecasts, not guarantees. Governor Bullock said she did not know whether the current rate "is where we end up long-term."

How MPFG Capital Can Help

MPFG Capital (ACL 553698) is a Melbourne-based non-bank lender. We have written more than $700 million in loans and now settle more than $20 million a month. We mainly serve self-employed borrowers, new migrants and borrowers declined by major banks, with bilingual (English and Mandarin) service.

Relevant options in a rising-rate market:

Alt Doc Loan / MPFG Bright: for self-employed borrowers who can show income through BAS statements, bank statements or an accountant's letter
MPFG Easy Refi: refinancing for loans of up to $7.5 million
Commercial Loan: for business owners buying or refinancing commercial property
Bridging Finance / Private Funding: short-term funding when you need to buy before you sell

Offices:

Melbourne HQ: 403/685 Burke Rd, Camberwell VIC 3124
Sydney: Level 2, 25 Ryde Rd, Pymble NSW 2073
Brisbane: S102, 35 Miles Platting Rd, Eight Mile Plains QLD 4113

📞 03 9696 8888 · ✉️ finance@mpfg.com.au

All applications are subject to individual assessment. An initial conversation does not involve a credit enquiry.

Frequently Asked Questions

What is the RBA cash rate now?

The RBA cash rate target is 4.60%, effective 30 September 2026. It was raised by 0.25 percentage points on 29 September 2026. It is the highest level since November 2011.

How many times has the RBA raised rates in 2026?

Four times: in February (to 3.85%), March (to 4.10%), May (to 4.35%) and September (to 4.60%). In total, the cash rate has risen by 1.00 percentage point in 2026.

How much more will I pay on a $750,000 mortgage?

If the full 0.25% is passed on, repayments on a $750,000 30-year principal-and-interest loan rise by about $124 per month, or about $1,490 per year. Since the start of 2026, the same loan costs about $488 more per month.

Do non-bank lenders raise rates when the RBA does?

Non-bank lenders set rates based on their own funding costs, which usually move with the cash rate. Timing and size can differ from the major banks. Check your lender's notice or ask your broker.

I'm self-employed. Am I more affected by this hike?

Often, yes. Self-employed borrowers are more likely to sit close to bank serviceability limits, so a higher assessment rate can turn an approval into a rejection. Alt Doc loans assess income differently and may be an alternative, subject to individual assessment.

Will the RBA raise rates again in November 2026?

It is possible but not certain. ANZ forecasts a hike to 4.85% in November. CBA, NAB and Westpac see 4.60% as the likely peak. The September-quarter CPI in late October will be the key signal.

Is now a bad time to buy property in Melbourne or Sydney?

We can't tell you when to buy. Cotality data show home values fell 1.1% in Melbourne and 1.4% in Sydney in August 2026, so buyers have more room to negotiate. The more important step is to confirm your borrowing capacity at today's rates before you bid.

Sources and Methodology

Reserve Bank of Australia: Statement by the Monetary Policy Board, 29 September 2026; cash rate target history
Australian Bureau of Statistics: Consumer Price Index, July 2026; Labour Force, August 2026
Cotality (formerly CoreLogic): Home Value Index, results as at 31 August 2026
ABC News: RBA decision coverage, 29 September 2026
Major bank economist forecasts (ANZ, CBA, NAB, Westpac), September 2026
Repayment and borrowing capacity figures are illustrative MPFG Capital calculations based on the stated assumptions. Borrowing capacity assumes a 3-percentage-point APRA serviceability buffer and a constant monthly surplus.

Author: MPFG Capital Editorial Team · MPFG Capital Pty Ltd · ACL 553698 · Published 29 September 2026

Disclaimer: This article is general information only and does not constitute financial advice. It does not take into account your objectives, financial situation or needs. Interest rates and lending criteria can change. All loan applications are subject to lender assessment, and approval is not guaranteed. Please seek independent advice before making any financial decision.