Rates are up again. On 17 March 2026, the Reserve Bank lifted the cash rate by 25 basis points to 4.10 per cent. It is the second hike in a row, coming just five weeks after February’s increase.
Every cut from 2025 has now been wiped out.
If you are on a variable rate mortgage, your repayments just went up again. If you are saving to buy, your borrowing power has taken another hit. This guide covers what happened, what the banks are predicting next, and what it means for property buyers in NSW.
Cash rate: 4.10% | Change: +0.25% | Date: 17 March 2026
Track how rate changes affect property affordability: checkthisproperty.com.au/news/rba-interest-rate-change-hike/
What Did the RBA Decide in March 2026?
The board voted 5 to 4 to raise. It was the closest call in months.
The four who voted to hold wanted to see whether the February hike was already slowing things down before moving again. The five who voted to raise were not willing to wait. They judged that inflation risks had shifted and that sitting on their hands would make things harder later.
After the meeting, Governor Michele Bullock was clear: the split was about timing, not about whether rates need to go higher. The board is not divided on the destination. Just on how fast to get there.
| Detail | March 2026 |
| Decision | Increased |
| New cash rate | 4.10% |
| Previous rate | 3.85% |
| Change | 0.0025 |
| Vote | 5 to 4 |
| Next meeting | 5 May 2026 |
Source: Reserve Bank of Australia, Monetary Policy Board Statement , 17 March 2026.
Why Did the RBA Hike Again?
Three things drove the decision.
Inflation is still too high. The ABS put headline CPI at 3.8 per cent for the year to January 2026. Trimmed mean inflation, which strips out volatile items, came in at 3.4 per cent. Both are sitting above the RBA’s 2 to 3 per cent target. The board said inflationary pressures had “picked up materially in the second half of 2025” and were not easing fast enough.
The jobs market is too strong. Unemployment has been coming in lower than the RBA expected. More people in work means more spending. More spending means prices stay higher for longer. The RBA needs demand to slow, and a tight labour market is working against that.
The Middle East conflict is pushing fuel prices up. The war has disrupted oil supply through the Strait of Hormuz. Fuel prices have already jumped. The board called this a “material risk” to inflation and one that could easily get worse before it gets better.
“A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025.” Monetary Policy Board | RBA, 17 March 2026
How We Got Here: Cash Rate Timeline
The rate has moved a long way in a short time. Here is the recent history.
| Date | Move | Cash Rate |
| November 2023 | Hike | 4.35% |
| February 2025 | Cut | 4.10% |
| May 2025 | Cut | 3.85% |
| August 2025 | Cut | 3.60% |
| February 2026 | Hike | 3.85% |
| March 2026 | Hike | 4.10% |
Source: Reserve Bank of Australia, Cash Rate Target | RBA.
Those three 2025 cuts gave a lot of borrowers breathing room after a bruising few years. Many households had already adjusted their budgets around the lower rate. The February reversal was a shock. The March follow-up confirms this is not a one-off.
What This Means for Repayments
February and March together add up to 0.50 per cent in total hikes. Here is what that costs on a standard principal and interest loan over 25 years.
| Loan Size | Extra Per Month | Extra Per Year |
| $500,000 | ~$155 | ~$1,860 |
| $750,000 | ~$232 | ~$2,784 |
| $1,000,000 | ~$310 | ~$3,720 |
| $1,250,000 | ~$387 | ~$4,644 |
Estimates only. Your actual increase depends on your lender, loan product, and remaining term.
Most major banks passed on the full 0.25 per cent within a few days of the RBA announcement. Check your lender’s announcement to confirm your new rate and when it kicks in. Do not assume they moved at the same time or by the same amount.
Roy Morgan’s March 2026 data shows 26.6 per cent of Australian mortgage holders, around 1.32 million households, are now at risk of mortgage stress. That is up from 23.9 per cent before the February hike.
What This Means for First Home Buyers
Two things happen when rates go up. Repayments rise and borrowing capacity falls.
On borrowing capacity, every 0.25 per cent increase knocks around $10,000 to $15,000 off what a typical buyer can borrow. Across two hikes, that is potentially $20,000 to $30,000 less than buyers had banked on at the start of the year. That matters a lot in a Sydney market where price brackets are tight.
For buyers who settled recently on a variable rate, repayments are already higher than they were at approval. If the numbers are feeling tight, talk to your broker about your options sooner rather than later.
There is one upside for those still saving. High-interest savings accounts and term deposits are paying better rates too. Your deposit grows a little faster. Shop around, because not all lenders pass on rate increases to savers at the same pace.
NSW first home buyers should check their eligibility for the First Home Buyers Assistance Scheme. Properties up to $800,000 still attract a full stamp duty exemption, regardless of where the cash rate sits. The First Home Guarantee lets eligible buyers get in with a 5 per cent deposit and no LMI. See our first home buyer assistance guide for the full picture.
What the Big Four Banks Are Predicting
All four major banks are calling at least one more hike at the May meeting. Westpac is the outlier, forecasting rates could go much higher.
| Bank | May 2026 Call | Peak Rate Forecast |
| ANZ | Hike to 4.35% | 4.35% |
| CBA | Hike to 4.35% | 4.35% |
| NAB | Hike to 4.35% | 4.35% |
| Westpac | Hike to 4.35% | 4.85% by August |
Source: Interest Rate Forecast & Predictions For 2026 | Canstar
CBA’s head of Australian economics Belinda Allen said the March quarter CPI data, due in late April, would be the key test. A big undershoot on inflation could change the May picture. Westpac is more concerned, tipping further hikes in June and August if inflation stays sticky.
HSBC’s chief economist Paul Bloxham thinks one or two more hikes should be enough to do the job. A Finder survey of economists found 84 per cent expect no cuts at all in the next 12 months.
The next decision is 5 May 2026.
What to Do Now
Whether you already own or are trying to get in, a few things are worth doing straight away.
Log in and check your rate. Most lenders passed on the March hike quickly, but not all moved at the same time. Confirm your new rate and the date it applies from. It should be in your lender’s app or a written notice.
Know your buffer. If repayments have risen over the past few months, work out where you stand between income and outgoings. Two more potential hikes at 0.25 per cent each would add another $155 to $310 per month on a typical Sydney loan. Plan for that now rather than after the next meeting.
Talk to a broker. If cash flow is feeling tight or you are rolling off a fixed rate soon, get advice. Refinancing, splitting fixed and variable, or switching to a more competitive lender are all options worth exploring. Do it before things get difficult, not after.
First home buyers: keep looking. Higher rates are a reason to budget carefully. They are not a reason to sit on the sidelines. Western Sydney, the Parramatta Light Rail corridor, and suburbs along the Sydney Metro West route are still seeing solid buyer activity. The First Home Guarantee and FHBAS are still available and still worth using.
Before you commit to any property, run a Check This Property report. Zoning, planning overlays, and flood or bushfire risks all affect value. The cash rate gets the headlines, but what sits on the title can cost you far more.
See interest rate updates: checkthisproperty.com.au/news/rba-interest-rate-change-hike/
Common Questions
What is the current RBA cash rate? 4.10 per cent as of 17 March 2026. That follows back-to-back hikes of 0.25 per cent in February and March.
When is the next RBA meeting? The board meets on 4 and 5 May 2026. The decision comes out at 2:30 pm on 5 May.
Will rates go up again in May? All four major banks are calling another 0.25 per cent hike. The March quarter CPI figures, out in late April, will be the deciding factor. If inflation is still running hot, another rise looks likely.
How much does 0.25 per cent add to repayments? On a $750,000 loan over 25 years, roughly $116 per month. The two hikes combined add around $232 per month on the same loan.
Does this affect fixed rate borrowers? Not immediately. Your rate is locked until your fixed term ends. But fixed rates already price in future hike expectations, so rolling onto variable when your term ends will reflect current conditions.
How does this hit my borrowing capacity? Each 0.25 per cent rise reduces what lenders will approve by around $10,000 to $15,000 for a typical borrower. Two hikes have taken a real bite. Talk to a broker to get your actual number.
Should I fix my rate now? Fixed rates already bake in what markets expect rates to do. Fixing is not automatically a way to dodge future hikes. It depends on your loan size, timeline, and cash flow. Get specific advice before deciding.
This article is general information only and is not financial advice. Forecasts can change quickly. Speak to a licensed broker or financial adviser before making any decisions.