Third RBA rate hike of 2026: what it means for borrowers
The Reserve Bank of Australia (RBA) has lifted the cash rate for the third consecutive time in 2026, raising it by 25 basis points to 4.35%, effectively unwinding all three cuts delivered last year and returning the cash rate to its previous cycle peak.
The decision, supported by eight of nine board members, was driven by persistent capacity pressures already building in the economy before the Middle East conflict, with higher fuel prices now adding a second layer of inflationary pressure through flow-on effects to goods and services more broadly.
The RBA expects inflation to peak at 4.8% in June before gradually easing, though Governor Bullock has left the door open to further hikes if second-round effects prove more persistent than expected.
For borrowers, the focus now shifts to loan structure. Three hikes in four months can change the calculation around fixed versus variable, offset accounts and repayment strategy. If your mortgage hasn't been looked at since last year's cuts, a lot has changed. Speaking to a mortgage broker now is a practical first step.
About the author – Alex Veljancevski is a Sydney Mortgage Broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking to refinance to a better deal on their home loan.
