RBA Rate Rise March 2026: How Much Your Mortgage Repayments Just Went Up
The RBA hiked the cash rate to 4.10% on March 17, 2026 — the second consecutive increase. Here's exactly how much more you'll pay on a $400K, $500K, $600K, $750K, and $1M mortgage, when banks pass it on, and what to do next.
The RBA raised the cash rate to 4.10% on March 17, 2026
The Reserve Bank of Australia increased the cash rate by 25 basis points to 4.10% at its March 17-18 board meeting, marking the second consecutive rate hike following the February increase from 3.60% to 3.85%. RBA Governor Michele Bullock cited persistent services inflation and a tight labour market as the primary drivers behind the decision. Trimmed mean inflation came in at 3.7% for the December quarter — still well above the RBA's 2-3% target band — and the February monthly CPI indicator showed no meaningful deceleration. The March hike was partially expected by markets, with futures pricing a roughly 60% probability of a move ahead of the announcement. The cumulative effect of the February and March hikes is a 50 basis point increase in just six weeks, taking the cash rate back to levels not seen since November 2024. The RBA's statement left the door open for further tightening, noting it 'will do what is necessary to return inflation to target within a reasonable timeframe' — language that markets interpreted as hawkish.
How much your mortgage repayments just increased (March hike alone)
The March 25 basis point increase translates directly to higher monthly repayments for anyone on a variable rate home loan. Assuming a 25-year remaining loan term and that your lender passes on the full 0.25% increase, here is exactly what you will pay extra each month. On a $400,000 mortgage, repayments increase by approximately $52 per month, or $624 per year. On a $500,000 mortgage, the increase is approximately $65 per month ($780 per year). A $600,000 mortgage goes up by approximately $78 per month ($936 per year). At $750,000, you are paying an extra $98 per month ($1,176 per year). And on a $1,000,000 mortgage, the increase is approximately $130 per month ($1,560 per year). These figures assume principal and interest repayments. If you are on an interest-only loan, the increase is slightly different — roughly $83 per month on a $400K loan and $208 per month on a $1M loan — because every basis point increase applies to the full balance with no principal reduction component to cushion it.
Cumulative impact: February + March hikes combined
The real pain is in the cumulative effect. Over February and March 2026, the cash rate rose by a total of 50 basis points (from 3.60% to 4.10%). That means your variable rate mortgage repayments have increased by roughly double the March-only figures in just six weeks. On a $400,000 mortgage, the combined increase is approximately $104 per month or $1,248 per year. On $500,000, it is approximately $130 per month ($1,560 per year). A $600,000 loan sees repayments rise by approximately $156 per month ($1,872 per year). At $750,000, you are paying an extra $195 per month ($2,340 per year). And on a $1,000,000 mortgage, the cumulative increase is approximately $260 per month or $3,120 per year. To put this in perspective, if you had a $600,000 variable mortgage at 6.10% before February, your monthly repayment was around $3,861. After both hikes, at 6.60%, it is now around $4,017 — an extra $156 every single month with no end date. Over the remaining life of a 25-year loan, the total extra interest paid on a $600K mortgage from these two hikes alone is approximately $21,000, assuming rates stay at this level.
When do banks pass on the rate rise?
Banks do not increase your rate the day the RBA moves. Each lender sets its own effective date for passing on rate changes to variable rate customers. Following the March 17 announcement, the confirmed dates so far are: NAB will adjust variable rates from March 27. Westpac's changes take effect on March 31. CBA and ANZ have not yet confirmed their effective dates, but based on past patterns, expect CBA to move in late March or early April and ANZ within two weeks of the RBA decision. Smaller lenders and non-bank lenders typically adjust within 1 to 3 weeks. Check your lender's website or app for the exact date your rate changes. Some lenders may not pass on the full 0.25% — particularly smaller banks and credit unions competing for market share — so it is worth checking the actual rate change, not just assuming it mirrors the RBA move. Your first higher repayment will typically be due one full repayment cycle after the new rate takes effect. If your rate changes on March 31 and you pay monthly, your first increased repayment will be in early May.
Will the RBA hike again in May 2026?
Markets are currently pricing a roughly 40% chance of another 25 basis point hike at the May 2026 RBA meeting. The decision will depend heavily on the March quarter CPI data (released in late April) and the March labour force figures. If trimmed mean inflation remains above 3.5% and unemployment stays below 4.2%, the case for a third consecutive hike strengthens considerably. Conversely, if the monthly CPI indicator for February and March shows a meaningful deceleration, or if the labour market shows signs of loosening, the RBA may pause to assess the impact of the 50 basis points already delivered. Most economists surveyed by major banks are split — Westpac and NAB are forecasting a pause in May, while CBA sees a 50-50 chance of another move. ANZ is the most hawkish of the Big Four, pencilling in one more hike in May to a terminal rate of 4.35%. The key metric to watch is the quarterly trimmed mean CPI — if it stays above 3.5%, the RBA has historically been willing to keep tightening regardless of the political and housing market pressures.
Should you fix your mortgage rate now?
The decision to fix depends on where you think rates are heading and your personal risk tolerance. As of March 2026, the best 2-year fixed rates from major lenders sit around 5.89% to 6.19%, while the best 3-year fixed rates are around 5.69% to 5.99%. Compare this to current variable rates of around 6.50% to 6.85% after the March hike. Fixing at sub-6% for 2-3 years gives you certainty and locks in a rate lower than current variable rates — but you lose the benefit if rates fall during your fixed period. If the RBA does hike again in May and then holds, fixing now could save you money in the short term. However, if the rate hiking cycle peaks at 4.10-4.35% and then reverses in late 2026 or 2027 as many economists expect, staying variable means you ride the rate cuts down. A middle-ground strategy is to split your loan — fix a portion (say 50-60%) for certainty and leave the rest variable for flexibility and to take advantage of any rate cuts. Whatever you decide, do not fix your entire loan if you plan to make extra repayments, sell the property, or refinance within the fixed period, as break costs can be substantial.
Three things to do right now to reduce the impact
First, review your offset account balance. Every dollar in your offset account reduces the balance your interest is calculated on. If you have $30,000 in offset against a $600,000 loan at 6.60%, you save approximately $1,980 per year in interest — enough to more than cover the repayment increase from both the February and March hikes. Consolidate savings from other accounts into your offset for maximum benefit. Second, make extra repayments if your loan allows it. Even an extra $50 per week on a $500,000 mortgage at 6.60% saves you approximately $68,000 in total interest and takes 4 years and 3 months off your loan term. The power of extra repayments is amplified in a higher rate environment because each dollar of principal you pay off saves you more in future interest. Third, refinance or negotiate. The difference between the highest and lowest variable rates among major lenders is currently around 0.50 to 0.80 percentage points. On a $500,000 loan, a 0.50% rate reduction saves approximately $175 per month — more than enough to absorb the March rate rise. Call your lender and ask for a rate review, or use a mortgage broker to compare alternatives. Lenders have significant discretion on pricing for existing customers, and the threat of refinancing often unlocks a better rate without you needing to actually switch.
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General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.
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