The Reserve Bank has raised the cash rate target by 0.25 percentage points to 4.60 per cent, announced at 2:30 pm today, Tuesday 29 September 2026. It is the fourth rise this year, and it takes the cash rate to its highest level since October 2011.
If you have a mortgage in Newcastle, Lake Macquarie or the Hunter, here is what today’s decision costs in dollars, what it does to your borrowing power if you are buying, and the tools you can use right now to check your own position.
What the Board Said
The decision was unanimous, and the Board’s reasoning was blunt. After three rises earlier in the year, it said, “inflation is still too high and the Board judged that, in light of recent developments, a further tightening in financial conditions is warranted.”
It pointed to a list of pressures that have built up since August. Global energy prices are “now much higher than had been assumed” because of the broadening conflict in the Middle East. Higher fuel prices are flowing through to other goods and services. And recent inflation outcomes in Australia “were stronger than expected.”
Two lines matter most for Hunter borrowers. The first is a housing observation that matches what we are seeing locally: “housing prices have fallen in most capital cities and new housing loans have declined noticeably.” The second is about what comes next. The Board said it will do what it considers necessary to bring inflation back to target, “including increasing the cash rate target further if needed.” Today may not be the last rise.
What It Costs a Typical Hunter Mortgage
National repayment tables usually assume a $600,000 loan. That is not what people borrow here. The table below uses the latest local medians from Cotality’s Home Value Index and assumes an 80 per cent loan, a 30-year principal and interest term, a typical variable rate of about 6.04 per cent moving to 6.29 per cent, and a lender that passes on the full rise.
| Buying at the local median | Loan (80%) | Before | After | Extra per month | Extra per year |
|---|---|---|---|---|---|
| Newcastle & Lake Macquarie house ($1,059,758) | $848,000 | $5,106 | $5,243 | $137 | $1,648 |
| Hunter Valley dwelling ($819,416) | $656,000 | $3,950 | $4,056 | $106 | $1,275 |
| Newcastle & Lake Macquarie unit ($808,899) | $647,000 | $3,896 | $4,001 | $105 | $1,257 |
Illustrative only. Median values from Cotality’s August 2026 Home Value Index, as reported by the Newcastle Herald. Your rate, balance and remaining term will differ.
If your loan does not look like any of those, here is the same rise across a range of balances:
| Loan balance | At 6.04% | At 6.29% | Extra per month | Extra per year |
|---|---|---|---|---|
| $400,000 | $2,408 | $2,473 | $65 | $777 |
| $500,000 | $3,011 | $3,092 | $81 | $972 |
| $600,000 | $3,613 | $3,710 | $97 | $1,166 |
| $700,000 | $4,215 | $4,328 | $113 | $1,361 |
| $800,000 | $4,817 | $4,947 | $130 | $1,555 |
| $900,000 | $5,419 | $5,565 | $146 | $1,749 |
The number people are actually feeling
One rise of 0.25 is manageable for most households. The pressure is the running total. If your rate has followed the cash rate all year, today’s rise takes this year’s increases to a full percentage point. On the $848,000 loan above, that is about $540 a month more than you were paying in January, or roughly $6,476 a year.
Check Your Own Numbers: Three Tools, Five Minutes
The tables above are averages. Your loan is not. These free calculators on our site will show you exactly where you stand, and none of them ask for your contact details.
1. Loan repayment calculator: what will I pay now?
Open the loan repayment calculator and enter your current balance, remaining term and current rate. Note the repayment. Then add 0.25 to the rate and run it again. The difference is what today’s decision costs you, if your lender passes it on in full.
While you are there, run it once more at 0.50 higher. Markets still see a chance of another rise before the cycle ends, and if that third figure is uncomfortable, you want to know now rather than in the new year.
2. Borrowing power calculator: can I still buy what I planned?
This is the one most buyers miss. Lenders test your application at your rate plus a 3 percentage point buffer, so every rise lifts the rate you are assessed at as well. As a rough guide, today’s rise trims borrowing capacity by about 2 per cent. A buyer who could borrow $700,000 last week may now be closer to $685,000.
Run your income and expenses through the borrowing power calculator again, even if you did it last month. It uses real living-expense benchmarks and the same 3 per cent assessment buffer lenders apply, so the result is closer to what a lender will say than most online estimates.
3. Debt consolidation calculator: is other debt making it worse?
If you are carrying a car loan, personal loan or credit card as well as your mortgage, a mortgage rise can make those repayments harder to carry. The debt consolidation calculator shows your new monthly repayment if those debts were rolled into one, alongside the estimated interest saved. Comparing the two tells you whether you are really saving money or just spreading the debt over a longer term.
Two more resources are worth a look if you are tightening the budget. The pay calculator shows your actual take-home pay per week, fortnight or month, so you can compare the new repayment with what really lands in your account. And our guide to weekly, fortnightly and monthly repayments explains the repayment habit that quietly offsets a rate rise over the life of the loan.
What Happens Next With Your Lender
The RBA sets the cash rate. It does not set your mortgage rate. Each lender now decides whether, when and by how much to move its own variable rates. The big banks usually announce within a few days of a decision, with the change taking effect on a date they set, often a week or two later. Your lender will write to you with the new repayment.
Three things I would do this week:
- Check the rate you are actually paying. Lenders routinely price new customers more sharply than existing ones. After four rises in a year, that gap can be wider than people expect. A repricing request to your current lender costs nothing and does not mean moving.
- Stay ahead of the minimum if you can. If you already pay more than your required repayment, raise it by the same amount as the rise. That keeps you ahead of schedule instead of quietly losing ground.
- Do not panic-fix. Fixed rates are priced off wholesale markets that already expect further moves. Fix because the certainty suits your budget, not to try to beat the market. Our guide to fixed versus variable works through the trade-offs.
If these numbers are more than your budget can take, you have more options than you might think. Read what to do if you are struggling with your mortgage, including your legal right to hardship help and free financial counselling in the Hunter.
If You Are Buying in the Hunter Right Now
Today’s rise lands in a local market that has already turned. Cotality’s figures show Newcastle and Lake Macquarie house values have fallen every month since April, homes are taking longer to sell, and there are more listings to choose from. In some suburbs, lower prices have already offset the higher repayments, as we worked through suburb by suburb in falling values and rate rises.
If you hold a pre-approval, do not assume the figure still stands. Lenders reassess at formal approval, and a lower borrowing capacity can surface at the worst possible moment, after you have made an offer. A quick recheck with your broker before you bid is a lot cheaper than finding out afterwards.
Whether you are in Newcastle, Lake Macquarie, the Hunter Valley or Port Stephens, the lenders are the same, but how they treat your application is not. Some lenders will now lend noticeably more than others on the same income.
When Is the Next RBA Decision?
The Board next meets on 2 and 3 November 2026, with the decision published at 2:30 pm on Tuesday 3 November. The full quarterly inflation figures land on 28 October, so that release will do a lot to decide whether today is the last rise or not.
Frequently Asked Questions
How much will the September 2026 rate rise add to a Newcastle mortgage?
On an $848,000 loan, which is 80 per cent of the Newcastle and Lake Macquarie median house value, a 0.25 percentage point rise adds about $137 a month, or around $1,648 a year. That assumes a 30-year principal and interest loan moving from about 6.04 per cent to 6.29 per cent, with the full rise passed on. Check your own loan with the loan repayment calculator.
When will the banks pass on the September rate rise?
Each lender decides for itself. The major banks usually announce their response within a few days of an RBA decision, and the new rate usually takes effect on a date the lender sets, often a week or two later. Your lender will write to you with your new repayment. Some lenders pass on less than the full rise, and some pass on more.
Does a rate rise reduce how much I can borrow?
Yes. Lenders assess your application at your interest rate plus a 3 percentage point buffer, so a 0.25 rise lifts the assessment rate too. As a rough guide, it cuts borrowing capacity by about 2 per cent. Someone who could borrow $700,000 before could now borrow about $685,000. Rerun your figures in the borrowing power calculator.
Is my home loan pre-approval still valid after a rate rise?
A pre-approval is conditional, not a guarantee. Lenders reassess your application at formal approval using the rates that apply then, so a rise between pre-approval and purchase can reduce the amount they will lend. If you are about to make an offer or bid at auction, have your pre-approval rechecked first.
Talk It Through Before Your Lender Writes to You
The borrowers who handle rate rises best are not the ones with the biggest incomes. They are the ones who looked at their position early, while they still had options. Often a short conversation turns up a sharper rate from your current lender, a better loan structure, or just the reassurance that you are in better shape than you feared.
Want to talk through what today’s decision means for you? Call David on 0417 676 191 or get in touch via our contact form.
This article is general information only and does not take into account your objectives, financial situation or needs. Figures are illustrative and current as at the date of publication. Interest rates, lender policies and government scheme rules change. Please seek advice specific to your circumstances before acting.
Sources
- Reserve Bank of Australia, Statement by the Monetary Policy Board: Monetary Policy Decision, 29 September 2026.
- Reserve Bank of Australia, Cash Rate Target, used to verify the last time the cash rate was at or above 4.60 per cent (4.75 per cent, from 5 October 2011).
- Reserve Bank of Australia, Board meeting schedules.
- Cotality Home Value Index, August 2026, as reported by the Newcastle Herald.
Ready to move forward?
Have questions about anything in this article? David from Rebus Finance can help with a free, no-obligation chat.