RBA March 2026: Cash Rate Rises to 4.10% — What It Means for Your Home Loan

The Reserve Bank of Australia (RBA) raised the official cash rate by 0.25% at its March 2026 meeting, lifting it to 4.10%. This is the second consecutive rate hike following a rise in February, and the first back-to-back increase since mid-2023.

What Did the RBA Decide?

On 17 March 2026, the RBA’s Monetary Policy Board voted five to four in favour of raising the cash rate from 3.85% to 4.10%. The decision was closely contested — all board members agreed that inflation remains too high, with the disagreement purely over timing.

Why Did the RBA Hike Rates Again?

Several factors drove the decision:

• Persistent underlying inflation: Despite previous rate hikes, underlying inflation has remained above the RBA’s 2–3% target band and is proving stickier than forecast.
• Tighter labour market: Unemployment has edged lower rather than stabilising, adding to wage pressures across the economy.
• Stronger-than-expected growth: The economy grew faster than its potential rate in the second half of 2025, meaning demand continues to outstrip supply.
• Global energy shock: The conflict in the Middle East and the closure of the Strait of Hormuz have pushed global oil prices sharply higher, adding to domestic price pressures. Governor Michele Bullock noted this was not the primary driver, but it adds to the risk that inflation stays elevated for longer.

Governor Bullock was direct in her post-meeting press conference: there is a real risk that inflation remains above the RBA’s target for longer than previously anticipated, and the Board was unwilling to wait.

What Does This Mean for Your Home Loan Repayments?

For most variable rate borrowers, this 0.25% increase will flow through to repayments within a month, once your lender passes on the change. On a $750,000 home loan, a 0.25% rate rise adds roughly $115–$120 per month to repayments. Combined with February’s hike, that’s over $230 per month added in just two months.

If you’re on a fixed rate that is due to expire in the coming months, now is the time to review your options before you roll onto a higher variable rate. Many borrowers coming off 2–3 year fixed rates are facing a significant payment shock in 2026.

What Should Borrowers Do Now?

• Review your current rate: If you haven’t had your loan reviewed in the past 12 months, you may be paying more than you need to. Lenders are still competing for refinances.
• Check your buffer: With rates rising, ensure you have a financial buffer in place. Consider whether an offset account could reduce your interest costs.
• Don’t panic-fix: Fixed rates have already priced in further hikes. Locking in now may not deliver the savings you expect — speak to us before making any changes.
• Revisit your borrowing capacity: Rising rates reduce how much you can borrow. If you’re planning to purchase, understanding your updated capacity is critical before you make an offer.

What Does This Mean for Expat and Non-Resident Borrowers?

If you’re an Australian living overseas or a non-resident looking to invest in Australian property, rate rises have a particular impact on your borrowing position.

Most lenders that accept foreign income apply a shading factor — typically 20–40% — meaning only a portion of your overseas income is counted for serviceability. With the cash rate now at 4.10% and lenders adding their standard assessment buffer on top, the serviceability floor is higher than it has been in years. This directly reduces how much you can borrow.

Some lenders have also tightened LVR (loan-to-value ratio) caps for non-resident and expat borrowers in recent months, typically capping loans at 70–80% LVR. This means a larger deposit is required relative to what resident borrowers need.

The good news: there are still lenders actively competing for expat and non-resident business, and specialist brokers can access products that aren’t available directly to borrowers. Currency movements may also partially offset the affordability impact for those earning USD, SGD, GBP, or other major currencies that have been strong against the AUD.

What Comes Next?

The RBA’s next scheduled meeting is in May 2026. Markets are pricing in a roughly even chance of another 0.25% hike at that meeting, though much will depend on upcoming inflation and labour market data. The four board members who voted to hold in March did so in a “hawkish” sense — they still believe further tightening will likely be necessary, they simply wanted more data first. This is not a Board that is leaning toward cutting rates anytime soon.

Talk to hfinance

Whether you’re a local owner-occupier, a property investor, or an Australian living abroad, the team at hfinance can help you understand exactly where you stand after this rate move and what your options are. We work with a panel of over 40 lenders and can quickly compare what’s available for your specific situation.

Contact us today for an obligation-free review of your home loan.