“Your lender is required to pass on the rate change and notify you. The main consideration is how long you have before the higher rate takes effect on your account.”
The RBA raised the official cash rate by 0.25% to 4.35% on 5 May 2026. All four major banks have announced they will pass the full increase to variable rate customers, with effective dates falling between 19 and 22 May 2026.
What changes immediately
Your interest rate will increase by 0.25 percentage points. On a $600,000 variable loan, this adds approximately $94 per month to your repayments. On an $800,000 loan, it adds roughly $125 per month. These are estimates based on a 25-year term; your lender will provide a recalculation specific to your balance.
What your lender is required to do
Your lender must notify you of the change in writing before the new rate takes effect. In most cases, this notification arrives by email or through your banking app. Your minimum repayment figure will be recalculated and updated automatically for most borrowers on direct debit.
What you can do now
Consider three actions in the next 30 days: confirm your new rate is correct, review your monthly cashflow buffer, and compare rates across the market. Many lenders are currently offering competitive refinance incentives.
If repayments are already under pressure
Contact your lender immediately if you are struggling with repayments. Most lenders have hardship teams that can restructure your plan temporarily. Acting early keeps more options open than waiting until a payment is missed.
→ You may wish to speak with a licensed mortgage broker to assess your personal circumstances. This is general information only. Individual circumstances vary and scheme details change regularly. Verify current eligibility, caps, and terms with official sources before making decisions. Speak with a licensed mortgage broker for advice tailored to your situation. All loans are subject to lender approval.
Sources: RBA Media Release MR-26-12, 5 May 2026; NAB, CBA, Westpac, ANZ rate change announcements, May 2026; ASIC MoneySmart, Home Loan Repayments Calculator.
