The Reserve Bank of Australia (RBA) is expected to lift the cash rate today amid signs inflation is getting out of hand.
A hike would raise the cash rate to 4.60%, lifting the average rate for a new owner occupier home loan to around 6.50% p.a. and the average bonus savings account rate to around 5.05% p.a.
Unanimous decision
Published 2:34pm, Tuesday
All nine members of the monetary policy board voted to raise the cash rate in September.
RBA hikes the cash rate to 4.60%
Published 2:30pm, Tuesday
The Reserve Bank cash rate will increase the cash rate by 25 basis points to 4.6% (up from 4.35%).
It’s the fourth hike to the cash rate in 2026 following 25-basis point increases in February, March, and May.
The latest increase sees the cash rate a full percentage point higher than where it started the year.
Will everyone be on board for a September rate increase?
Published 2:29pm, Tuesday
With economists in widespread agreement the Reserve Bank monetary policy board will raise the cash rate today, the big question is whether it will be a unanimous decision among the board’s nine members.
The split ratio on cash rate decisions has only been publicly released since July 2025 in a bid to increase transparency.
Since that time, there have been three split votes:
- 8-1 vote to raise the cash rate in May 2026 at 4.35% (eight to raise; one to hold)
- 5-4 vote to raise the cash rate in March 2026 at 4.10% (five to raise; four to hold)
- 6-3 vote to hold the cash rate in July 2025 at 3.85% (six to hold; three against)
While most economists have not indicated how they see the vote playing out, some have speculated it may not be a unanimous decision.
Westpac is forecasting another split vote while CommBank economists believe it will be a unanimous decision.
What could an RBA hike mean for savers?
Published 2:26pm, Tuesday
For people with cash to put in savings accounts or term deposits, a 25-basis point hike will see many headline rates comfortably over 5.25% p.a. - and perhaps more rates cracking the 6% benchmark.
A 5.75% p.a. savings rate would see someone with a $100,000 balance earn around $5,750 year in interest (depending on depositors meeting any conditions of course).
Even at an interest rate of 5.25% p.a., another rate hike would bring in an extra $250 a year.
If your savings account is paying considerably less than these rates, it's worth checking what some of the more competitive rates on the market are paying.
Bank Savings Account Base Interest Rate Max Interest Rate Total Interest Earned Introductory Term Minimum Amount Maximum Amount Linked Account Required Minimum Monthly Deposit Minimum Opening Deposit Account Keeping Fee ATM Access Joint Application Tags Features Link Compare Promoted Product Disclosure
then 5.05% p.a.
Promoted
Disclosure
Rate varies on savings amount.
then 5.40% p.a.
Disclosure
then 4.00% p.a.
Disclosure
How much could a rate hike cost mortgage holders?
Published 2:23pm, Tuesday
If you have a variable-rate home loan, you might be wondering what another rate hike could mean for your hip pocket.
A 25-basis point increase will see repayments on an average new home loan of $731,000 rise by about $115 per month - or about $1,380 extra a year.
However, this would come on top of three previous interest rate increases from February, March, and May which have already seen the average home loan repayment rise by around $340 per month so far in 2026.
A fourth rate increase would see average monthly repayments rising by an extra $455 a month - or $5,460 extra a year - so far in 2026.
For those looking to take out a new home loan, it’s estimated borrowing capacity for an average full-time wage earner looking at an average new home loan is reduced by around $11,000 as a result of another 25-basis point interest rate hike.
A fourth cash rate hike in 2026 will have knocked off more than $47,000 in borrowing capacity for a single borrower since the start of the year and around $94,000 less for a couple on average incomes.
For borrowers concerned about their ability to meet higher mortgage repayments, it’s wise to speak to your lender or mortgage broker early.
There are several options open to borrowers to support them during periods of hardship and lenders are legally obliged to assist.
See also: What is mortgage stress?
Household spending data shows discretionary spending fell in August
Published 2:15pm, Tuesday
However, one dataset the monetary policy board would have been able to access before making their decision was the Household Spending Index, released earlier on Tuesday morning.
Household spending remained unchanged for August, after rising in both July (+1.1%) and June (+0.9%).
It was 6.8% higher than the same time last year, seasonally adjusted.
Recreation and culture spending saw the largest monthly fall (-1.4%) with discretionary spending falling overall.
However, these falls were offset by higher transport spending (+2.3%) particularly on fuel and new vehicle sales, especially electric vehicles, likely in a bid to avoid higher fuel costs.
The monetary policy board may take some heart that discretionary spending is now on the way down.
Another interest rate increase could be expected to further dampen discretionary spending as some households will need to apportion more of their income to servicing higher mortgage payments and increased credit costs.
Rate decision to be made without August inflation data
Published 2:10pm, Tuesday
While inflation numbers are certainly key to any call on the cash rate, today’s decision will be made without the Australian Bureau of Statistics’ official CPI data for August which is due to be released on Wednesday.
The RBA will have to rely on its own - and perhaps market - estimates of August inflation figures in its deliberations.
Two of the major banks believe headline inflation could come in at 4% or above for August on the back of increased fuel prices while underlying inflation, the RBA’s preferred measure which excludes volatile items, is forecast to remain steady at 3.6%, unchanged from July.
The timing of this month’s meeting before the official monthly CPI data was initially a reason some economists gave for the board to defer another cash rate increase to November when it would have all-important quarterly CPI data at its disposal.
However, that view gave way to broad expectation of an earlier cash rate increase given escalating fuel prices and hawkish language from senior RBA officials in the lead-up to today’s meeting.
Monthly August CPI data will be released at 11:30am (AEST) on Wednesday 30 September.
September quarter CPI data is due for release on Wednesday 28 October, the week before the monetary policy board’s next cash rate meeting on Melbourne Cup Day.
Why would the Reserve Bank raise the cash rate in September?
Published 2:00pm, Tuesday
RBA governor Michele Bullock has outlined a number of 'upside risks to inflation' that would move the central bank’s monetary policy board to increase the cash rate and, earlier this month, told a Senate committee they appeared 'to be materialising'.
Chief among these is the increasing cost of fuel, caused by developments in the conflict in the Middle East which have again destabilised the global price and supply of oil.
The increased cost of petrol and diesel at the bowser is a significant contributor to inflationary pressures in the economy, not just in themselves but also in secondary pass-through to costs of other goods and services.
Ms Bullock has also referred to the inflationary pressures from the AI investment boom, specifically the construction of data centres, which are competing with housing construction demand and driving up labour and material costs for both.
Housing is a big contributor to CPI inflation measures.
Other factors include global weather events putting pressure on food and agricultural prices, the still robust jobs market, and the RBA’s own assessment of businesses intending to pass on their higher input costs to consumers.
These are the factors that indeed appear 'to be materialising' with the Reserve Bank long warning its monetary policy board won’t hesitate to increase the cash rate if it judges such risks threaten to fuel inflationary pressures.
What are experts predicting for today's decision?
Published 1:50pm, Tuesday
Economists and commentators are all but unanimous there will be a 25-basis point increase to the cash rate today, taking it to 4.60%.
That would make it the highest cash rate Australia has seen in 15 years and the second-highest among the world’s developed economies, behind only Iceland.
The economic teams at each of the big four banks (CBA, Westpac, NAB, ANZ) are unanimous in predicting a hike today while financial markets have been pricing in a 90% chance of a September rate increase for more than a week.
Many experts are taking their lead from senior Reserve Bank officials who have done little to hose down speculation of a cash rate increase during their public addresses and appearances over the past few weeks.
When will the RBA announce its interest rate decision?
Published 1:40pm, Tuesday
The RBA monetary policy board will deliver its verdict on the cash rate at 2:30pm AEST.
Those under Australian Central Standard Time (ACST) will receive the news at 2pm while in Western Australia, the decision will be announced at 11:30am AWST.
Reserve Bank governor Michele Bullock is scheduled to appear at her customary post-meeting media conference an hour after the decision is handed down.
Welcome: LIVE coverage of the RBA's September cash rate decision
Published 1:30pm, Tuesday
Hello and welcome to Savings.com.au's live RBA cash rate coverage. I'm Denise, Savings.com.au's senior finance journalist, and I'll be with you today giving the latest on the RBA's September decision, expert and industry commentary, and any responses from major banks and lenders.
PLEASE refresh this page periodically for the latest updates and if you have any questions, hit me up at denise.raward@savings.com.au.