Variable mortgage rates rise as lenders pass on the latest RBA increase

Higher variable mortgage rates began taking effect across much of the lending market on Friday, extending the impact of the Reserve Bank’s November increase from the official cash rate to household loan accounts.

Realestate.com.au reported late on Friday that 44 lenders had moved their variable rates, including Commonwealth Bank, Westpac, NAB and ANZ. The four major banks each announced increases of 0.25 percentage points, matching the Reserve Bank’s latest move.

The change is straightforward at the interest-rate level but may be less obvious in a household’s bank account. A lender can begin charging interest at the higher rate before changing the amount automatically collected as a regular principal-and-interest repayment.

Commonwealth Bank said its higher variable rates became effective on 13 November. Customers could see their new rate in the CommBank app and NetBank from Saturday, while updated repayment information was due to appear from Sunday where minimum repayments were changing.

ANZ also made its 0.25 percentage point increase effective on 13 November, with the new rate visible through its app and internet banking from Saturday. Westpac applied the same increase to owner-occupier and investment variable loans from Friday.

Check the rate as well as the repayment

Borrowers should not assume an unchanged direct debit means their mortgage has escaped the increase. The interest rate shown on the loan account is the important starting point, followed by the date on which the required repayment will change.

Some customers may already be paying more than the minimum, in which case their scheduled transfer may not need to move immediately. Others may receive advance notice before the bank automatically lifts the direct debit.

ANZ estimated that a 0.25 percentage point increase would add about $79 a month to repayments on a $500,000 owner-occupier principal-and-interest loan. The actual effect varies with the customer’s loan balance, remaining term, existing interest rate and repayment arrangement.

Canstar analysis reported by realestate.com.au estimated that, if rates remain at their new level, a typical borrower who began 2026 with a $600,000 mortgage could pay $2,738 more during 2027 than during 2026. For a $1 million mortgage, the estimated difference was more than $4,500.

Those figures compare annual costs during a year in which several rate rises arrived progressively with the cost of carrying the higher rate for a full year. They are not an additional one-off bank fee.

What buyers and sellers should consider

For buyers, the increase may affect both repayments and borrowing capacity. A pre-approval obtained before the November rate rise should be checked before bidding at auction or signing a contract, particularly if the intended purchase was already near the lender’s maximum limit.

Higher rates can also change the relative cost of different properties. A cheaper home requiring less debt may become more attractive, while a property with large strata levies, immediate repairs or unusually high insurance costs can place extra pressure on the same household budget.

Sellers should recognise that buyers may now return with lower limits or attach more importance to finance clauses. A buyer’s earlier budget should not be assumed to remain available after their lender updates its assessment.

Existing borrowers who expect difficulty meeting the revised payment should contact their lender before missing a repayment. Banks have hardship and repayment-support processes, and early contact generally leaves more options than waiting for arrears to develop.

The interest increase may already be applying even if the automatic repayment has not yet changed.

What it means for you

• Check the interest rate displayed on your loan account and the date your minimum repayment changes.
• Buyers should reconfirm pre-approval and borrowing capacity before making an unconditional offer.
• Review any voluntary extra repayments to ensure they still cover the new minimum amount.
• Contact your lender early if the higher payment will be difficult to manage.