A fifth rate rise in 2026 now looks close to a done deal. After the September quarter inflation figures, economists have stopped debating whether the Reserve Bank will lift again and started debating when the cycle ends. For a borrower, that raises a plain question: if the cash rate keeps climbing, what can you actually do about your own loan?
Where the cash rate is heading
Two of the big banks now forecast an increase at the RBA’s 3 November meeting. That would take the benchmark rate to 4.85%, a level last seen in 2008. The September hike had already pushed it to a 15-year high.
One bank economist called the move an “insurance hike”, a pre-emptive step against risks from Middle East tensions, the global AI investment surge and limited domestic capacity. Some analysts are already flagging a possible further rise in February 2027.
The inflation detail is what shifted views. Market services inflation was the strongest since 2024. That matters because services prices are less tied to global swings, so they are harder for the RBA to wait out.
Key numbers
- Cash rate if the November hike lands: 4.85%
- Hikes in 2026 so far, plus the one now expected: five in total
- Possible further move flagged: February 2027
- Cuts pencilled in by both banks: late 2027
What a fifth hike does to a repayment
Lenders are likely to pass the increase on quickly. We do not have a bank-by-bank breakdown, so take a simple rule of thumb: each quarter-point rise adds roughly $15 to $16 a month for every $100,000 borrowed on a standard variable loan. On a $600,000 balance, that is about $90 to $95 a month for one hike. Treat that as a ballpark, not a quote. Your own figure depends on your loan term and remaining balance.
For a deeper look at how cash rate moves feed into repayments, see our guide to the RBA, interest rates and repayments.
The one lever borrowers hold
Here is the catch. The cash rate is a single number, but the rate on your loan is not. Actual rates vary widely between borrowers and between lenders, and the reporting behind this story points out that threatening to refinance often wins a discount.
That gap is where the saving sits. A borrower who has never rung their lender since settlement is often paying more than a new customer would. A repricing request closes some or all of that gap.
A workable approach:
- Find your current rate, remaining balance and loan-to-value ratio.
- Check what the same lender advertises to new customers, and what two or three rivals offer.
- Ring your lender and ask for a rate review, saying plainly that you are comparing refinance options.
- If they will not move, ask a broker to price a switch, including any discharge and settlement costs.
The maths is straightforward. If repricing trims, say, 0.3 percentage points off a $600,000 loan, that is roughly the same as cancelling one hike. A fifth rise adds about $90 to $95 a month. A successful negotiation can wipe most of that out before the increase even shows up.
Where competition bites, and where it does not
Not every borrower has the same bargaining power. Lenders compete hardest for clean, low-risk, owner-occupier loans with comfortable equity. Those borrowers can usually extract a discount, because they are the ones a rival will happily take.
Power fades for borrowers who look riskier or more stretched. High loan-to-value ratios, interest-only terms, investor loans and thin serviceability all narrow the field of lenders willing to offer a better deal. That is exactly the group under most pressure, and the one with the least room to move. Our earlier look at mortgage arrears risk as the RBA nears another hike shows why that squeeze matters.
Funding costs add another layer. Smaller lenders face greater funding pressure when rates rise, which can limit how aggressively they cut prices. At the same time, the fight for market share can push some of them to sharpen offers anyway. The result is uneven: a good discount from one lender, little movement from another.
What could derail this
The hike is not locked in until the RBA moves. A prominent economist who recently thought rates had peaked is now less sure of timing, which tells you how fluid views are. A weaker run of data could change the picture, and both banks expect the economy to slow, with risks of softer property values and rising unemployment.
Falling values matter for your negotiating position. If your loan-to-value ratio rises because your property price slips, lenders see you as riskier and your leverage drops. That is an argument for acting before a slowdown, not after.
The practical take
Do not wait for 3 November. Lenders tend to be most flexible with borrowers who ask before a rate rise, not those who complain after it. Spend an hour comparing rates, ring your lender, and get a broker quote as a fallback. The saving will not offset every hike, but it can take a real bite out of the next one.
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General info, not financial advice.
