Best Home Loan Rates in Australia: Current Rates After the RBA Rise

Rates as of October 2026 · Updated monthly and after each RBA decision · By the MortgageCompass Editorial Team · How we research

Australian home loan rates are rising again. On 29 September 2026 the Reserve Bank raised the cash rate by 0.25 points to 4.60%, its fourth increase this year, and the major banks passed the rise on to variable rates. According to Canstar, the average variable rate for owner-occupiers paying principal and interest is now about 6.63%, while the lowest variable rates start from about 5.69%. The RBA’s next decision is on 3 November 2026.

Averages from Canstar’s database on 2 October 2026 for a $600,000 owner-occupier loan at 80% of the property’s value. Investors pay more: the average investor variable rate is about 6.89%. To compare with other countries, see current rates in Canada and the UK.

The gap between average and best rates

In Australia the difference between what typical borrowers pay and what the sharpest lenders charge is unusually large, and many long-standing customers pay more than new ones. Illustrative example for a $600,000 loan over 30 years with principal and interest repayments:

• At the 6.63% average: about $3,844 a month.
• At a 5.79% rate, among the lowest at 80% of the property’s value: about $3,517 a month, or roughly $327 less every month and close to $3,900 a year.
• How lenders test you: under APRA’s rules lenders assess whether you could afford the loan at least 3 points above its rate, so at 6.63% they check repayments of about $5,102 a month at 9.63%. Our borrowing power guide explains how this limits what you can borrow.

If you have had your loan for a few years, ask your lender to match the rate it offers new customers, and compare it with what other lenders offer before refinancing.

Fixed or variable after four rate rises?

Average fixed rates for one to three years, between about 6.52% and 6.61%, now sit close to the average variable rate. That suggests lenders expect rates to stay high for a while. A fixed rate protects you if the RBA keeps raising, but most fixed loans limit extra repayments, may not offer a full offset account and charge break costs if you refinance or sell early. A variable rate keeps that flexibility but will rise with any further increase. Many borrowers split the loan, fixing part and keeping the rest variable with an offset. Our guide to fixed vs variable home loans covers the trade-offs.

Offset accounts: worth paying for?

An offset account is a transaction or savings account linked to your home loan. Every dollar in it reduces the balance you pay interest on, while the money stays available. Offsets usually come with package loans that have an annual fee and sometimes a slightly higher rate, so the question is whether your savings balance is large enough to make that worthwhile.

In the default example, $50,000 kept in the offset of a $600,000 loan saves about $208,000 in interest and clears the loan around six years early, because the repayment stays the same while less of it goes to interest. But paying the same $50,000 into a basic loan at 5.89% as an extra repayment would cost about $26,000 less overall. That difference is the price of flexibility. For many families an emergency fund in the offset is worth it, but if you would never touch the money, a cheaper basic loan with redraw may be better value. Investors should get tax advice first, because money redrawn from a loan can be treated differently from money taken out of an offset. See how extra repayments shorten a loan in our amortization guide.

How to compare Australian home loans

1. Use the comparison rate, not just the headline rate. Lenders must show a comparison rate that includes most fees, calculated on a standard loan of $150,000 over 25 years. If your loan is much larger, the headline rate and annual fee matter more.
2. Check what happens after an introductory rate. Some of the lowest variable rates only apply for the first year or two.
3. Know your loan to value ratio. Lenders price in bands, and borrowing more than 80% of the property’s value usually means lenders mortgage insurance, unless you qualify for a government scheme. First home buyers should read our first home buyer guide.
4. Look at features you will use. Offset, redraw, free extra repayments and the ability to split the loan can be worth more than a small rate difference.

Frequently asked questions

Will the RBA raise rates again?

Nobody knows for certain. In September the RBA said inflation remained too high, partly because of higher energy prices, and that further tightening was needed. Its next decision is on 3 November 2026. Check whether your budget could cope with another 0.25 or 0.50 point rise before choosing between fixed and variable.

How quickly do banks pass on a rate rise?

Major banks usually announce within days of an RBA decision, and the new variable rate typically applies from a date a week or two later. Your lender must tell you about the change to your repayments.

Is refinancing worth it?

Often, if you can cut your rate by a meaningful amount and the switching costs are low. Remember that a new lender will reassess your borrowing power with the serviceability buffer, and fixed loans may charge break costs.

Sources

• Reserve Bank of Australia: Monetary Policy Decision, 29 September 2026
• Reserve Bank of Australia: 2026 Monetary Policy Board meeting dates
• Canstar: Average home loan interest rates in Australia (2 October 2026)

This page is for general information only and is not financial, tax or credit advice. It does not consider your objectives or circumstances. Rates change frequently, so check the lender’s current rate, comparison rate and Target Market Determination before applying, and speak to a licensed credit adviser if you are unsure.