This article is general information only and does not constitute financial or tax advice. Consult a qualified tax professional for advice specific to your situation.
Key takeaways
- The Reserve Bank Monetary Policy Board raised the cash rate target by 25 basis points to 4.60% on 29 September 2026, a 15-year high and the fourth hike of the year (RBA media release mr-26-27).
- Cumulative move for 2026 is 100 basis points from the 3.60% starting point on 1 January.
- Decision was unanimous. Governor Michele Bullock labelled the new rate restrictive at the post-meeting press conference but kept the door open on further tightening (The Adviser, 29 September 2026).
- NAB, CBA, Westpac and ANZ have signalled full 25 basis point pass-through. Average owner-occupier variable moves from about 6.90% to 7.15%. Average investor variable moves from about 6.50% to 6.75% (Canstar RBA cash rate September 2026).
- On a $750,000 principal-and-interest loan with 25 years remaining, the September hike alone adds about $114 a month. Cumulative 2026 bill is about $454 a month, or $5,450 a year. On a $500,000 loan the September add is about $76, cumulative $303.
- Cotality's August 2026 Home Value Index shows dwelling values down 0.9% in the month, 93% of capital suburbs falling over winter, Sydney upper-quartile 10.7% below peak, Melbourne upper-quartile 10.5% below peak.
- Median time to sell across the capitals has moved from 28 days a year ago to 39 days, with a 4.2% median vendor discount (Cotality August 2026 insights).
- Bullock pointed to Middle East escalation and rising oil prices as the trigger that shifted the inflation risk profile (SBS live coverage, 29 September 2026).
- Current headline CPI sits at 3.5% year-on-year, above the 2 to 3% RBA target band.
- SQM Research had national vacancy at 1.3% in August 2026 with five capitals below 1% and gross rental yields at 3.79%, the highest since 2019. Rent-side pressure remains asymmetric to the cost side.
This article is general information only. It does not consider your personal circumstances and is not tax, credit or investment advice. Speak to a registered mortgage broker, tax agent or licensed adviser before acting on any of the figures below.
What the RBA did at 2:30 this afternoon#
The Reserve Bank Monetary Policy Board raised the cash rate target by 25 basis points to 4.60% at its 29 September 2026 meeting. Media release mr-26-27 went out at 2:30pm AEST. The Board decision was unanimous (Domain live coverage).
This is the fourth hike of 2026. The cash rate started the calendar year at 3.60% and has moved 25 basis points at each of the February, May, August and September meetings, for a cumulative 100 basis point lift over nine months. The 4.60% print is the highest cash rate since late 2011 (SBS live coverage).
The Board framed the move around inflation not being embedded. Headline CPI still runs at 3.5% year-on-year, above the 2 to 3% target band. The Board said growth in aggregate demand needs to remain subdued for a further period to bring inflation back to target within a reasonable timeframe.
The bill on a real investor loan#
Every property investor with a variable-rate loan now pays more. The mechanical numbers, using the RBA's average variable rate methodology on a 25-year principal-and-interest loan and assuming lenders pass through the full 25 basis points (Canstar workings for the September decision):
- $500,000 loan: about $76 more per month from the September hike. Cumulative across all four 2026 hikes: about $303 a month, or $3,636 a year.
- $600,000 loan: about $92 more per month from the September hike. Cumulative: about $364 a month.
- $750,000 loan: about $114 more per month from the September hike. Cumulative: about $454 a month, or $5,450 a year.
- $1,000,000 loan: about $152 more per month from the September hike. Cumulative: about $606 a month, or $7,272 a year.
Investor loan products typically sit 20 to 25 basis points above owner-occupier on the same LVR and product mix, so an investor variable at a big four moves from about 6.50% to about 6.75% on full pass-through, versus the owner-occupier average of 6.90% moving to 7.15%. Interest-only investor loans price higher again. For a $750k interest-only investor loan at 7.00% after pass-through, monthly interest alone is roughly $4,375, up from about $4,219 the day before the decision.
If you carry more than one investment loan, run the math on each. The interaction with negative gearing means the tax-adjusted cash cost of holding the property depends on your marginal rate, but the pre-tax cash outflow moved on the RBA statement. It hits your account this month or next.
Big four pass-through: who moves and when#
Standard pattern at each of the four majors is announcement within 24 to 48 hours of the RBA decision, with the new rate taking effect one to two weeks after the announcement. On the September round:
- NAB was first out on prior hikes and typically leads by half a day.
- CBA follows within 24 hours.
- Westpac and ANZ move together shortly after.
All four have signalled full 25 basis point pass-through on variable-rate products for both owner-occupiers and investors, per the Savings.com.au big four tracker and Canstar's cash rate summary. Fixed rates are a separate lever. Several majors moved fixed rates ahead of the RBA on the wholesale swap curve during September, which is why the new fixed offers you see at this cycle already price the hike.
The refinance case: the spread between an average big four investor variable and a competitive non-major or mortgage manager investor variable still runs 50 to 70 basis points. On a $750,000 investor loan, 60 basis points is about $4,500 a year in interest. It is the single largest lever a landlord has on cash flow into the October billing cycle. See our earlier read on the May 2026 refinance window for the mechanics that still apply.
Cotality: prices already falling into the hike#
The unusual feature of this cycle is that the RBA is lifting into a property market that is already contracting.
Cotality's August 2026 Home Value Index shows:
- Combined capital city dwelling values fell 0.9% in August.
- 93% of capital city suburbs recorded a fall over winter.
- Sydney upper-quartile house values are 10.7% below peak.
- Melbourne upper-quartile house values are 10.5% below peak.
- Median time to sell has moved from 28 days a year ago to 39 days across the capitals.
- Median vendor discount is 4.2%.
The narrative through winter was that the market had absorbed the first three hikes and was now pricing a fourth. What today's decision does is confirm the fourth and, more importantly, remove the assumption that this is the end. Bullock explicitly kept the door open on further tightening.
This matters for the September and October auction pipeline, the spring campaign math for anyone deciding whether to list before Christmas, and the marginal buyer's borrowing capacity. On a 6.75% investor variable, a single-income buyer's maximum loan size sits roughly 15% below what it was on the 3.60% cash rate at the start of the year, on a straight-line borrowing-capacity calculation.
What Bullock actually said#
The post-meeting press conference is where the forward guidance sits.
Bullock said the Board judged the September move was warranted because upside risks to inflation have materialised in the six weeks since the August SoMP was published. She specifically cited the escalation in Middle East conflict and the resulting lift in oil prices as the trigger that shifted the inflation risk profile (SBS live coverage, The Adviser 29 September 2026).
Three lines from the presser matter for how landlords should read the November meeting:
- 4.60% is restrictive. Bullock's language stopped short of "sufficiently restrictive", which is the phrase central banks use to signal a pause. She said the rate is restrictive, which means it is doing work, and that if inflation keeps falling, no more hikes may be needed. That is a conditional pause.
- Recession is not the central case. The RBA's baseline is a demand-driven slowdown that returns inflation to target without triggering a sustained rise in unemployment. That is a soft-landing thesis, and it is the thesis that has to hold for the market pricing of an eventual 2027 cut to survive.
- More hikes remain possible. Bullock reaffirmed the Board's willingness to raise again if the inflation trajectory does not follow the August SoMP path. Oil prices, unit labour costs and services CPI are the three variables the Board will watch through the October CPI print and the November meeting.
The 22 September 2026 Musalem-Bullock speech on wage-price spirals laid out the analytical frame the Board was reading into today's decision. The read from that speech was that the Board sees the current wage growth path as consistent with a return to target if productivity picks up as forecast, but is not comfortable that services inflation is decelerating fast enough on its own.
Yield versus cost: the negative gearing arithmetic just moved#
National gross rental yields at SQM Research sit at 3.79%, the highest since 2019. That looks like a positive shift for investor cash flow. In the same window, the average investor variable has moved from about 6.50% to about 6.75%. The gap between the funding cost and the gross rental yield is roughly 300 basis points on the average metropolitan investor holding.
That gap has to be closed by capital growth over the hold period, plus the tax deduction on the negative gearing loss. On a $750,000 loan at 6.75% versus a 3.79% gross yield on a $900,000 property, the pre-tax rental income of about $34,110 covers roughly 67% of the annual interest cost of about $50,625 before principal repayment, non-mortgage costs, land tax, insurance, maintenance and management fees.
Negative gearing on existing established stock is still in force. The 12 May 2026 Federal Budget announced the carve-out on established dwellings acquired on or after 1 July 2027, but existing holdings and any established-dwelling contract signed before that date are grandfathered. The cash cost through the current cycle is real. The tax offset at your marginal rate softens it. The composition of that trade-off has moved on today's decision.
Rent-side: still the asymmetric story#
The one part of the ledger that has not softened on the RBA's four hikes is rent.
The August 2026 SQM Research vacancy release had national residential vacancy at 1.3%, holding roughly flat month on month, with 41,039 vacant dwellings recorded across the country. Five capitals sit below 1% and none is above 2.1%. Perth, Adelaide and Hobart continue to run the tightest of the metros.
Advertised rents nationally are up 5.7% year-on-year on the SQM rents index, which remains ahead of wage growth of about 3.3% on ABS Wage Price Index, the gap we covered in our March 2026 affordability ceiling piece.
The point for a landlord is that the cost side has moved 100 basis points this year while the rent side has moved 5 to 6% on the year. The absolute cash change on the rent side on a $750,000 property renting at $34,000 a year is about $1,900 a year. The absolute cash change on the mortgage cost side across 2026 is about $5,450 a year. The rent lift only covers about 35% of the mortgage cost lift on a typical metropolitan investment holding.
What to do this week#
Three concrete moves in the seven days following today's decision.
One. Pull your current investor loan rate and confirm the pass-through date with your lender. If you are with a big four, expect the new rate on your account within two weeks. If your break-even shifted materially, run the refinance case now against a competitive investor variable at 6.20% or below. On a $750,000 loan a 55 basis point saving is about $4,125 a year in interest.
Two. Review the next rent review date on your tenancy. Every state has different rules on frequency and notice periods. In NSW, rent can be increased once per 12-month period from 31 October 2024. Victoria has the same rule under the Residential Tenancies Act. Queensland is once per 12 months since 1 July 2023. If you are inside a window where the next review is due, the current SQM rent index gives you the market defensible position for any increase.
Three. Update your investor cash flow model to include the new interest cost and the amended tax position under the 12 May 2026 negative gearing carve-out if you are acquiring new stock through the current cycle. The 1 July 2027 cutoff is now nine months away.
Bring it into one view#
The 100 basis points of RBA tightening across 2026 hits every investor in the same place. What separates the properties that get through the cycle from the ones that force a sale is the discipline on the ledger. Interest cost, land tax, repairs, management fees, insurance and body corporate all move on their own schedule, and none of them wait for the November SoMP.
Propkt was built for exactly this problem. Our mortgage calculator sits under an updated 4.60% cash rate assumption. Our expense tracker lets you upload interest statements and land tax notices directly against each property, so the tax-adjusted cash cost of a hike shows up on your dashboard the day it happens. The rent register keeps the last increase, the next allowable review date and the CPI reference so you can time increases against your state's rules and the market. Start a free Propkt landlord account and get the picture on your portfolio before the October billing cycle lands.