Australia's big four banks pass on the cash rate rise from 9 October

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Kooky

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Australia's four largest banks pass the latest cash rate rise on to their variable-rate home loan customers from Friday 9 October 2026. Each of the four set that date in its own media release of 30 September: Commonwealth Bank, Westpac, NAB and ANZ all announced an increase of 0.25 percentage points a year in their variable home loan rates, effective 9 October. That is the size of the move the Reserve Bank of Australia made on Tuesday 29 September, when it lifted the cash rate to 4.6%.

The size and the date of the move come from the banks themselves. The rates each bank now advertises, and the detail on fixed rates and notice periods, come from a report published on 9 October by the trade title Australian Broker, which draws on figures from Canstar, and they are attributed that way throughout this article. Together they describe the second half of a rate decision. The Reserve Bank moved ten days ago; the cost reaches borrowers' loan accounts now, and their repayments later still.

It lands in a month when the services that help people in arrears are already stretched. ABC News reported on 1 October that Mortgage Stress Victoria had paused most new intakes after demand doubled between January and August, and that contacts to the National Debt Helpline were well above their level of a year earlier.

What changes on 9 October

The four releases of 30 September say the same thing in slightly different words. Westpac's applies the 0.25-point rise to new and existing customers. ANZ's covers its Australian home loans, NAB's its standard variable home loan rates, and Commonwealth Bank's all the variable home loan rate changes it announced that day. Westpac's release also lifts the total variable rate on its Westpac Life savings account, bonus interest included, by 0.25 points to 5.25% from the same date.

Canstar's figures, as reported by Australian Broker, give the lowest variable rate each of the big four offers an owner-occupier paying principal and interest once the rise is applied. Westpac is the lowest of the four at 6.24% and ANZ the highest at 6.5%, a gap of 0.26 percentage points between the two. The table sets those rates beside each bank's view of where the cash rate goes next, which the same report also lists.

These are the lowest advertised rates, not the rates most existing customers pay. Sally Tindall, data insights director at Canstar, told Australian Broker that borrowers who have not reviewed their loan could now be on a rate that starts with a 7, a level she described as unthinkable a year ago. She added that the adjustment would not be easy for many households.

The big four are not alone. Canstar counts more than 40 lenders on its database that have passed on the full rise, among them Bendigo, ING, AMP, Bankwest and St George. Among lenders that have published new pricing, the lowest variable rate Canstar found was 5.94%. The firm expects the average variable rate for owner-occupiers to settle at about 6.49%, which would place the cheapest big four rate below the average and ANZ's almost exactly on it.

The move matters to nearly every borrower because so few Australian loans are fixed. An ABC News explainer published on 9 October, citing the Reserve Bank, says fewer than 5% of Australian mortgages are on a fixed rate. The rest move when the lender moves.

Fixed rates have risen more than once

Borrowers looking to fix have found that door getting more expensive at the same time. Australian Broker reports that ANZ has raised its fixed rates by up to 0.25 percentage points, the second increase in just over three weeks. ANZ's one-year fixed rate goes from 6.49% to 6.69%, a rise of 0.20 points, and according to the report it is now the lowest fixed rate among the big four.

The other three have moved as well. NAB has raised its fixed rates twice in three weeks, the report says, while CBA's fixed rates are up by as much as 0.48 points and Westpac's by as much as 0.45 points over the same period.

One consequence is visible in the numbers: ANZ's cheapest one-year fixed rate, at 6.69%, now sits above the lowest variable rate at each of the four banks. A fixed rate buys certainty about repayments for its term; on these figures it does not buy a lower rate on day one. Whether that trade suits a borrower depends on the loan, the household and what rates do next, which nobody can state as fact.

The ABC explainer sets this against other countries. In the United States, it notes, two bodies, Fannie Mae and Freddie Mac, guarantee about 70% of mortgages. Richard Holden, a professor of economics at UNSW, told the ABC: "There are pros and cons but we don't have anything like that in Australia."

When the higher repayment arrives

A rate that changes on 9 October does not mean a larger repayment in October. Banks give notice before they raise the amount they collect, and the notice differs from one bank to the next. According to Australian Broker, CBA gives at least 20 days, while Westpac, NAB and ANZ give at least 30. The report says many customers will not pay the higher amount for two to three months.

For agents, brokers and conveyancers, the delay explains why a rate rise is felt in two waves. The rate on the loan changes first, on the date the bank sets. The household budget changes later, when the larger repayment is first collected, and for many owners that is still weeks away.

How the cash rate reached 4.6%

The September decision was the fourth increase of 2026. CBA's newsroom, in a note dated 30 September, puts the year's rises at 100 basis points in total, which means the cash rate began the year at 3.6%. The Reserve Bank's own media release of 5 May records one of the earlier steps, from 4.10% to 4.35%, decided by eight votes to one.

The latest step was unanimous, CBA's note says. ABC News describes the resulting 4.6% as the highest cash rate in 15 years.

The board did not signal that it had finished. According to the CBA note, it kept open the option of raising the cash rate target further if needed. The same note records two observations from the Reserve Bank that bear directly on the property trade: housing prices had fallen in most capital cities, and new housing loans had declined noticeably.

Inflation is the backdrop. ABC News reported on 1 October that annual headline inflation was 4% in August, up from 3.5% in July. In that report Gavan Ord, business investment lead at CPA Australia, described inflation as stubbornly persistent.

A mortgage stress service at its limit

The ABC's 1 October report gives the clearest picture of what the rate cycle is doing at the hard end. Mortgage Stress Victoria told the broadcaster that demand for its help doubled between January and August, and that it has paused new intakes except for the most urgent cases. Nadia Harrison, the service's chief executive, described it as the greatest demand the organisation has seen.

One detail stands out for anyone who assumes hardship follows job loss: more than half of the service's clients are in work, according to the ABC. The report also describes a long-time owner in South Yarra who lost his job in April and now sometimes lets his home on Airbnb.

Nationally, the ABC gives the count of contacts to the National Debt Helpline for August in two successive years.

That is 1,163 more contacts than a year earlier, an increase of 39%. Both months fall before the September rise and before the pass-through of 9 October, so neither figure reflects the latest increase.

The ABC also cites Digital Finance Analytics on where the pressure is concentrated in Victoria. On its figures for the end of August, the most affected areas were Narre Warren, Cranbourne, Roxburgh Park, Pakenham and Ballarat. The method needs stating with the result: the firm defines stress as a household's outgoings exceeding its income, and extrapolates phone surveys using census data. It is an estimate, not a count of loans in arrears. Juanita Pope, chief executive of the Victorian Council of Social Service, told the ABC that housing stress in the state is severe and widespread.

How widespread the strain is

The Reserve Bank's own assessment, published on 1 October in its October Financial Stability Review, is narrower. It puts about 2% of variable-rate owner-occupiers in a cash-flow shortfall, and says formal hardship arrangements have risen but remain low.

The two pictures are not in conflict; they measure different things. The Reserve Bank looks at the whole population of variable-rate owner-occupiers, most of whom are meeting their repayments. A service for borrowers under stress sees only the households that are not. A small share of all borrowers can still be more than one service is able to take on, which is what Mortgage Stress Victoria's paused intake shows.

Sentiment has moved faster than arrears. Australian Broker, in a second report on 9 October, says the Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 in October. Just over 80% of respondents expect mortgage rates to rise over the next year, up from 63% in September. For people selling property, that expectation matters as much as the rate itself, because it shapes what a buyer is willing to borrow.

A rate rise reaches the loan account within days and the repayment within months. The figures on hardship are older than both.

What forecasters expect next

The next Reserve Bank decision is due on Tuesday 3 November, at the end of a two-day meeting, and the big four are split on it. ANZ and Westpac expect one more rise that day, to 4.85%, according to Australian Broker. CBA and NAB regard 4.6% as the peak. CBA's economists, in the bank's 30 September note, see possible cuts in August and November 2027.

Other voices sit between those positions. David Robertson, chief economist at Bendigo Bank, expects no change in November or December, Australian Broker reports, while cautioning that borrowers should not expect rates to ease quickly. Ian Harper, who sat on the Reserve Bank board from 2016 until August 2026, told ABC News on 8 October that another rise this year is plausible; the same report says financial markets price about a one-in-three chance of a move in November.

The ABC adds a measure of how the board has been deciding. Since vote tallies began to be published in July 2025, there have been eight unanimous decisions and three split votes.

None of these forecasts is a fact about November. What is settled on 9 October is narrower: the variable rate has gone up at the big four, fixed rates have risen alongside it, and the larger repayments will begin to arrive around the end of the year.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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