Reserve Bank of Australia raises rate to 4.6% — ABC News Australia
In Australia, the Reserve Bank raised the official interest rate by 0.25 percentage points to 4.6%. This is already the fourth increase since the beginning of the year, aimed at curbing inflation, ABC News Australia reports.
Impact on mortgage loans
Mortgage holders with variable rates will feel the increase most quickly, as banks usually pass the central bank's decision on to borrowers in full. According to Canstar's estimate, a 0.25-percentage-point rate increase raises the monthly payment on a A$600,000 loan with 25 years remaining by about A$91.
The four rate increases in 2026 have added about A$360 per month in total to repayments on such a loan, or approximately A$4,320 per year. For an A$750,000 loan, the latest increase means an additional A$114 per month, and for a A$1 million loan, A$152.
Borrowers with fixed rates will not feel changes until their fixed-rate term ends. At the same time, Canstar estimates that the borrowing capacity of a person on the average full-time annual salary of A$108,650 could fall by more than A$47,000. For a couple with two such incomes, the reduction could amount to almost A$95,000.
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Rent, savings and currency
The impact of the rate on renters is indirect. Reserve Bank chief economist Sarah Hunter said that rental levels are primarily determined by demand and supply in the local market. According to Cotality's quarterly review, rental rates across the country rose by 1.6% in the June quarter, while the vacancy rate was 1.6%, below the five-year average of 1.8%.
The rate increase may also raise returns on savings accounts and term deposits. AMP chief economist Shane Oliver suggested that deposit rates would likely continue to rise. Higher rates usually support the Australian dollar, but Belinda Allen of Commonwealth Bank noted that its exchange rate is also influenced by global rates, commodity prices, the situation in China, investor sentiment and expectations for the Australian economy.
Most analysts surveyed by Bloomberg expect there will be no further increases by the end of the year. The Reserve Bank of Australia's next rate decision is scheduled for November 3.
