RBA Interest Rate History and Forecast
The Reserve Bank of Australia (RBA) plays a pivotal role in the national economy, managing currency and monetary policy—most notably through its decisions on the official cash rate.
Reviewed 11 times a year, this rate defines the interest on overnight loans between banks and directly influences borrowing costs across the country.
For Australian homeowners, investors, and especially expats managing loans from overseas, tracking these movements is essential for cash flow planning and strategic property decisions.
This article breaks down current RBA interest rates, examines historical trends, and outlines future expectations to help you understand how shifting lending conditions could impact your financial strategy.
What is the Cash Rate and How Does it Impact Interest Rates?
The cash rate is the interest rate the RBA charges banks for overnight loans between themselves. This influences all interest rates in Australia. When the RBA raises or lowers the cash rate, variable mortgage and business loan rates will typically move in the same direction.
Changes to the cash rate aim to encourage spending and investment in the economy. Lower rates make borrowing cheaper, stimulating growth. Higher rates make borrowing more expensive, slowing inflation. The current cash rate in Australia is 4.35% as of 16 June 2026, after three consecutive rate hikes earlier in the year.
Get a free Australian mortgage assessment today.
Current Variable Interest Rates in Australia
Here are the key variable rates across different lending sectors based on RBA’s Lenders’ Interest Rates Statistics.
Housing Interest Rates
The average variable rate on outstanding mortgages is 5.51% while the variable rate for new mortgages is 6.00%. Variable rates for interest-only home loans are higher at 6.77%. Fixed rate mortgages don’t fluctuate with the cash rate in the short term, but lenders will eventually pass on the higher funding costs from rate hikes.
Business Lending Rates
Business investment is advisable for anyone wanting to start a business in Australia. Here are the interest rates for all business sizes in Australia and what kind of downward trends they are on.
- Small Businesses: Business variable interest rates currently sit higher than mortgage rates, but vary significantly depending on loan size. Small businesses with loans up to $500k pay an average outstanding variable rate of 6.89% while the variable rate for new loans is 7.14%. This is because smaller firms often pose higher credit risks.
- Medium Businesses: For medium-sized enterprises, average variable rates on lending between $500k to $2 million are lower at 6.08%. The variable rate for new loans for medium businesses is 6.19%. Mid-market firms represent lower credit risks.
- Large Businesses: Finally, large corporate variable rates for borrowing over $2 million average 5.59%, the lowest business rates. However, new loans have a variable rate of 5.38% for large businesses. Big firms pose the least credit risk.
History of RBA Interest Rate Movements
RBA Cash Rate History Overview
The RBA has maintained an inflation target of 2-3% on average over time. Interest rate decisions aim to keep inflation within this band.
Here is a timeline of key rate changes.
- June 2026: The RBA held the cash rate steady at 4.35%, pausing to assess the impact of the year’s earlier hikes and an oil-driven inflation spike.
- May 2026: The cash rate rose by 0.25% to 4.35%, the third increase of the year, as underlying inflation stayed above target.
- March 2026: The cash rate rose by 0.25% to 4.10%, as capacity pressures and early inflation surprises pushed the Board back into tightening.
- February 2026: The cash rate rose by 0.25% to 3.85%, ending the 2025 easing cycle as inflation picked up more than expected.
- August 2025: Cash rate cut to 3.60% (down 0.25% from 3.85%).
- May 2025: The cash rate decreased by 0.25% to 3.85%, taking rates below 4% for the first time in two years.
- February 2025: The cash rate dropped to 4.10% after a 14-month pause, signalling the first rate cut in four years.
- December 2024: The cash rate remained at a constant 4.35% through 2024 due to the RBA’s commitment to control inflation.
- November 2023: The cash rate rose by 0.25% to 4.35% after a four-month pause.
- June 2023: The cash rate rose to 4.10% and remained steady.
- February 2023: The cash rate rose to 3.35% after gradually increasing from 0.85% in July 2022 to the start of 2023.
- July 2022: The cash rate rose again by 0.50% to 1.35% in response to a spike in inflation to 5.1%.
- May 2022: The cash rate finally rose 0.25% to 0.35%, the first rate rise since November 2020. Rising inflation triggered the change.
- November 2020: The cash rate fell to a record low of 0.10% as the recession deepened. Housing and business borrowing costs hit all-time lows.
- March 2020: The cash rate was cut to 0.50%, then further down to 0.25% as COVID-19 hit. This supported the economy during lockdowns.
- 2016-2019: The cash rate slowly declined from 1.5% to 0.75% as wage growth and inflation remained weak.
- 2008-2016: The cash rate fell dramatically to 1.50% due to the global financial crisis, sending mortgage rates down.
- 1996-2008: The cash rate further dropped to 4.25% as the economy boomed and mortgage rates increased.
- 1990-1996: The cash rate dropped down to 7.50% with some fluctuations on the way.
- 1960-1990: The cash rate gradually rose up to a whopping 17.50%!
- 1960: The initial cash rate was set at 2.5%.
RBA Cash Rate 2026
Below is a simple month-by-month summary of the RBA’s cash rate decisions throughout 2026.
| Effective Date | RBA Cash Rate | Notes |
|---|---|---|
3 February 2026 | Rose to 3.85% | First hike of 2026, ending the prior easing cycle. |
17 March 2026 | Rose to 4.10% | Second consecutive hike; board vote 5–4. |
5 May 2026 | Rose to 4.35% | Third hike; board vote 8–1. |
16 June 2026 | Held at 4.35% | Board paused to assess tightening and an oil-price inflation shock. |
RBA Cash Rate 2025
Below is a simple month-by-month summary of the RBA’s cash rate decisions throughout 2025.
| Effective Date | RBA Cash Rate | Notes |
|---|---|---|
7 February 2025 | Dropped to 4.10% | Rate slashed for the first time after four years. |
7 May 2025 | Dropped to 3.85% | Second cut of 2025 as inflation continued easing. |
13 August 2025 | Dropped to 3.60% | Third cut of 2025, taking rates below 4% again. |
18 February 2025
The Reserve Bank of Australia lowered the cash rate target to 4.10% in February 2025—its first cut in 14 months—citing moderating underlying inflation. While the rate cut provides some relief for home loan borrowers, the RBA’s policy stance remains restrictive to ensure inflation returns to target, suggesting borrowing rates may stay relatively high.
RBA slashed the cash rate for the first time in four years, down to 4.10% in February 2025. The rate cut will gradually be passed down to borrowers as lenders look to reduce their interest rates.
RBA Cash Rate 2024
Below is a simple month-by-month summary of the RBA’s cash rate decisions throughout 2024. The cash rate remained unchanged at 4.35% all year round.
| Effective Date | RBA Cash Rate | Notes |
|---|---|---|
7 February 2024 | Held at 4.35% | Rate unchanged, monitoring economy. |
20 March 2024 | Held at 4.35% | Inflation stabilising. |
8 May 2024 | Conditions consistent with target. | |
19 June 2024 | No new inflationary pressures. | |
7 August 2024 | Balanced approach maintained. | |
25 September 2024 | Rates seen as appropriate level. | |
6 November 2024 | Ongoing stability in indicators. | |
11 December 2024 | Year ends with unchanged policy. |
11 December 2024
Concluding 2024, the RBA left the cash rate at 4.35%. Inflation is contained, and growth appears on track. Board members anticipate gradual progress in 2025 but stand prepared to respond if external shocks or shifting demand threaten price stability.
6 November 2024
Little movement in inflation or employment supported leaving the rate at 4.35%. The RBA pointed to steady business sentiment and cautious consumer behaviour. Officials remain ready to adjust rates if signs of renewed inflationary pressures emerge.
25 September 2024
The Board judged 4.35% suitable given steady inflation, strong employment, and moderate household spending. Members highlighted the focus on longer-term sustainability, emphasising a data-dependent approach to any potential changes.
7 August 2024
The RBA maintained 4.35%, noting stable inflation and job markets. They aim for a balanced stance to encourage growth without sparking excessive price rises. Global economic risks and domestic demand trends remain key factors guiding future policy moves.
19 June 2024
With consumer price growth still subdued, the RBA kept the rate at 4.35%. Modest wage increases and a stabilising housing market reinforced their decision. Policymakers continue to watch for any global or domestic developments that could drive inflation higher.
8 May 2024
Inflation sits comfortably within the 2–3% range, and employment is steady. The RBA held at 4.35%, citing these positive indicators. Board members stressed the need to remain flexible in case global demand weakens or local wage growth accelerates unexpectedly.
20 March 2024
New data showed inflation levelling off, prompting the RBA to hold at 4.35%. Domestic wage pressures remain contained, helping tame price growth. Policymakers will keep monitoring global market conditions for any factors that might reignite inflation.
7 February 2024
The RBA kept the cash rate at 4.35%, citing stable economic growth and moderate inflation. Board members highlighted steady consumer spending and wage growth. They remain alert to global uncertainties, including shifting trade dynamics, and will adjust policy if significant risks emerge.
Throughout 2024, the RBA did not alter the cash rate, keeping it at 4.35% as economic conditions remained broadly stable and in line with the Bank’s targets.
RBA Cash Rate 2023
Below is a month-by-month summary of the RBA’s cash rate decisions during 2023. The RBA typically meets on the first Tuesday of each month (there is no meeting in January). The cash rate didn’t fluctuate as much as last year.
| Effective Date | RBA Cash Rate | Notes |
|---|---|---|
8 February 2023 | Increased to 3.35% (from 3.10%) | Responding to higher inflation and strong labour market. |
8 March 2023 | Increased to 3.60% (from 3.35%) | Further tightening due to persistent price pressures. |
5 April 2023 | Held at 3.60% | First pause after a series of hikes, assessing the impact. |
3 May 2023 | Increased to 3.85% (from 3.60%) | Surprise hike after pause, inflation still a concern. |
7 June 2023 | Increased to 4.10% (from 3.85%) | Another increase to rein in stubborn inflation. |
5 July 2023 | Held at 4.10% | Pausing to gauge the effect of earlier hikes. |
2 August 2023 | Held at 4.10% | Inflation easing, but at a slower pace. |
6 September 2023 | Held at 4.10% | Monitoring data for sustained inflation decline. |
4 October 2023 | Held at 4.10% | Economy adjusting to higher rates, cautious approach. |
8 November 2023 | Increased to 4.35% (from 4.10%) | Inflation proving sticky, prompting another hike. |
6 December 2023 | Held at 4.35% | Evaluating whether further tightening is needed. |
6 December 2023
Concluding the year, the RBA held the cash rate at 4.35%. Recent data hinted that inflation was gradually moderating, but officials stressed that risks remained. They will continue to watch consumer spending, wage growth, and global conditions to decide if additional hikes are necessary to maintain price stability.
8 November 2023
Despite earlier pauses, the RBA lifted rates again due to inflation’s stubborn resilience in some sectors. Service-related costs and ongoing supply disruptions contributed to persistent price pressures. The hike signalled the Board’s commitment to meet its inflation target even if it meant further near-term economic headwinds.
4 October 2023
Acknowledging that households and businesses were adapting to the tighter monetary environment, the RBA decided to maintain 4.10%. Inflation continued to trend lower, though the pace was gradual. Policymakers indicated they would remain cautious and data-focused, especially regarding global trends in commodities and trade.
6 September 2023
The RBA once again chose to keep rates steady, highlighting the need for a clear and consistent downward path in inflation. While consumer confidence showed signs of softening, board members noted wage growth remained moderate. They reaffirmed readiness to adjust policy if inflation failed to recede as expected.
2 August 2023
With signs that inflation was beginning to cool, the RBA held at 4.10%. They acknowledged the positive trend but cautioned it was not yet sufficient to declare victory. Continued vigilance was emphasised, as the economy remained sensitive to global shocks and domestic wage developments.
5 July 2023
In July, the RBA decided to hold the rate, providing time to evaluate how higher borrowing costs were influencing inflation and consumer spending. Early indicators suggested a moderation in housing demand and a tempering of wage pressures, but the Board wanted clearer evidence of a sustained inflation drop before acting further.
7 June 2023
Persistently strong inflation prompted another rate rise. Policymakers noted ongoing resilience in household spending, and elevated input costs continued to pressure prices. By lifting the cash rate again, the RBA aimed to bring inflation back under control and maintain economic stability.
3 May 2023
Despite pausing the month before, the RBA reverted to tightening as new data revealed inflation remained stubbornly high. The surprise move underscored concerns about price momentum, particularly in services and energy costs. The Board reiterated its commitment to restoring inflation to the target band over time.
5 April 2023
After consecutive increases, the RBA opted to pause and evaluate how previous rate hikes were affecting the economy. Early signs showed some cooling in housing and discretionary spending, suggesting that tighter monetary conditions were beginning to bite. The Board used this break to gather more data before deciding on further moves.
8 March 2023
Continuing concerns about elevated inflation led the RBA to raise rates again. Policymakers noted that while some supply-chain issues were easing, domestic factors, including solid consumer demand and wage growth, continued to push prices higher. This decision aimed to temper spending and keep inflation in check.
8 February 2023
The RBA raised the cash rate as inflation figures came in above forecasts, signalling persistent price pressures. A robust labour market, with low unemployment and rising wages, gave the Board confidence that the economy could handle tighter monetary policy. Officials emphasised the need to rein in inflation before it becomes entrenched.
Over 2023, the RBA alternated between tightening monetary policy to combat persistent inflation and pausing to assess the cumulative impact of higher rates on the economy. By the end of the year, the cash rate stood at 4.35%.
RBA Cash Rate 2022
Below is a month-by-month summary of the RBA’s cash rate decisions during 2022. The Reserve Bank of Australia typically meets on the first Tuesday of each month (except January). There was a lot of rate fluctuation this year.
| Effective Date | RBA Cash Rate | Notes |
|---|---|---|
2 February 2022 | Held at 0.10% | Economy recovering- inflation rising but rates remained low. |
2 March 2022 | Held at 0.10% | RBA waiting for clearer inflation and wage signals. |
6 April 2022 | Held at 0.10% | Continued patience as full employment not yet achieved. |
4 May 2022 | Increased to 0.35% (from 0.10%) | First rate rise in 11 years, responding to higher inflation. |
8 June 2022 | Increased to 0.85% (from 0.35%) | Strong inflation and job market prompted second hike. |
6 July 2022 | Increased to 1.35% (from 0.85%) | Further tightening as inflation pressures persisted. |
3 August 2022 | Increased to 1.85% (from 1.35%) | RBA continued normalising rates amid robust economy. |
7 September 2022 | Increased to 2.35% (from 1.85%) | Ongoing inflation concerns drove another significant hike. |
5 October 2022 | Increased to 2.60% (from 2.35%) | Smaller hike as RBA aimed for a more measured approach. |
2 November 2022 | Increased to 2.85% (from 2.60%) | RBA balancing growth risks against persistent inflation. |
7 December 2022 | Increased to 3.10% (from 2.85%) | Rates at highest level since 2012, aiming to rein in inflation. |
7 December 2022
Ending the year, the RBA continued its tightening cycle, reflecting ongoing inflation concerns across housing, energy, and services. Policymakers emphasised their commitment to bringing price growth back within target, even if it meant higher borrowing costs.
2 November 2022
Despite concerns about slowing global growth, sticky inflation remained a priority. The Board raised rates again but signalled a willingness to carefully balance controlling inflation with maintaining domestic economic resilience.
5 October 2022
After several consecutive hikes, the RBA opted for a less aggressive move. Policymakers wanted to assess the accumulated impact of earlier increases on consumer sentiment, housing, and overall economic momentum.
7 September 2022
Worsening global inflationary pressures, partly spurred by supply chain disruptions and geopolitical tensions, kept upward pressure on prices. The RBA moved decisively to quell inflation fears, raising rates to further cool consumer demand.
3 August 2022
Strong domestic data and ongoing price pressures drove the cash rate higher once again. The Board underscored that interest rates were still relatively low by historical standards, signalling more hikes could be needed.
6 July 2022
With price pressures broadening—particularly in food and energy—the RBA continued raising rates. Policymakers aimed to cool demand and maintain the credibility of the inflation target, while still supporting a healthy level of economic growth.
8 June 2022
Persistently high inflation and a robust labour market prompted the RBA to tighten policy further. The Board felt a bigger hike was justified to prevent inflation expectations from becoming entrenched in wage and price settings.
4 May 2022
With inflation hitting multi-year highs, the RBA finally raised the cash rate. They signalled the start of a tightening cycle to contain consumer prices, highlighting that the economy had moved beyond its emergency phase.
6 April 2022
The Board noted encouraging jobs data but wanted more time to assess whether the economy was near full employment. While inflation was edging higher, the RBA took a cautious stance, aiming to support sustained economic momentum.
2 March 2022
Despite mounting price pressures, the RBA held off on raising rates, citing limited evidence of strong wage growth. Officials wanted to see further labour market improvements and more concrete signs that inflation would stay within the Bank’s 2–3% target range.
2 February 2022
The RBA decided to keep rates at record lows to support the post-pandemic recovery. While inflation was picking up, policymakers felt the economy still needed accommodative settings, particularly as some sectors were lagging and Omicron-related disruptions lingered.
Across 2022, the RBA raised the cash rate multiple times in response to rising inflation and strong economic conditions, moving from a record low 0.10% at the start of the year to 3.10% by December.
RBA Cash Rate 2021
Below is a simple month-by-month overview of RBA cash rate decisions in 2021. The Reserve Bank of Australia announced its decision on the first Tuesday of most months. Throughout the year, the cash rate remained unchanged at 0.10%.
| Effective Date | RBA Cash Rate | Notes |
|---|---|---|
3 February 2021 | Held at 0.10% | RBA maintained low rates to support economic recovery. |
3 March 2021 | Held at 0.10% | Continued accommodative stance amid subdued inflation. |
7 April 2021 | Held at 0.10% | Economic conditions improving but not enough to lift rates. |
5 May 2021 | Held at 0.10% | Supportive monetary policy to encourage job growth. |
2 June 2021 | Held at 0.10% | Low rate setting aiding recovery post-COVID-19 disruptions. |
7 July 2021 | Held at 0.10% | Emphasis on sustainable inflation before raising rates. |
4 August 2021 | Held at 0.10% | Ongoing pandemic uncertainties kept policy accommodative. |
8 September 2021 | Held at 0.10% | Slow wage growth and low inflation justified low rates. |
6 October 2021 | Held at 0.10% | Supporting employment and economic resilience remained key. |
3 November 2021 | Held at 0.10% | RBA awaited clearer inflation signals before adjusting. |
8 December 2021 | Held at 0.10% | Rates stayed low to foster full employment and inflation. |
8 December 2021
Concluding the year, the RBA left policy settings untouched. Although the economy was recovering, the Board reiterated its focus on achieving higher employment and sustainably lifting inflation back into the target band.
3 November 2021
With mixed economic data and patchy sectoral performance, the RBA needed further clarity on inflation trends. Holding at 0.10% reflected a cautious approach, aiming to ensure the recovery gained traction without premature tightening.
6 October 2021
Rates stayed unchanged as the RBA prioritised reducing unemployment and helping businesses weather pandemic-related challenges. Board members reiterated that consistent progress in wages and inflation would guide future decisions.
8 September 2021
Policymakers pointed to subdued wage increases as a sign that inflation wasn’t yet accelerating. Holding at 0.10% allowed the RBA to support sectors still lagging in recovery and maintain favourable financing conditions.
4 August 2021
COVID-19 outbreaks and renewed lockdowns in some regions reinforced the need for low rates. The Board highlighted that uncertainties around domestic consumption and international travel continued to influence their cautious stance.
7 July 2021
Although indicators showed a pick-up in activity, inflation was yet to firmly return to target. The RBA stressed that any rate adjustments would hinge on evidence of durable inflationary pressure, accompanied by stronger wage growth.
2 June 2021
With parts of the economy still recovering from lockdowns, the RBA kept rates low to spur lending and investment. Housing showed particular strength, but the Board remained cautious about declaring victory over pandemic aftereffects.
5 May 2021
Maintaining the cash rate at 0.10% was seen as vital to fostering employment gains. Policymakers noted that while sectors of the economy were rebounding strongly, broader momentum was needed to ensure a more robust labour market.
7 April 2021
Ongoing vaccine rollouts and returning consumer confidence supported gradual recovery. However, the RBA judged that unemployment and inflation had yet to reach desired levels, justifying another month at record-low rates.
3 March 2021
Despite some signs of economic improvement, inflation remained weak, prompting the RBA to hold at 0.10%. The Board reiterated its commitment to low rates until inflation and wage growth showed more convincing, sustained progress.
3 February 2021
The RBA decided to keep the cash rate at its historic low, aiming to bolster confidence in the wake of the pandemic. With unemployment still elevated and inflation below target, policymakers prioritised fostering a stable environment for businesses and households.
Throughout 2021, there were no increases or decreases; the RBA consistently kept the cash rate at the record low 0.10%.
RBA Cash Rate 2010-2020
From 2010 to 2020, Australia’s cash rate trended steadily downwards as the RBA responded to persistently low inflation, moderate growth, and global economic uncertainty. Early in the decade, rates were gradually reduced from relatively moderate levels in an effort to support the economy following the post-mining boom slowdown. This easing continued through the mid-2010s as inflation remained subdued and wage growth stagnated.
By the late 2010s, global conditions, including low interest rates abroad and sluggish domestic demand, encouraged the RBA to push rates even lower. By 2020, the cash rate had reached historically low levels, reflecting the Bank’s ongoing efforts to underpin employment, growth, and financial stability in a challenging economic environment.
RBA Cash Rate 1990-2010
From 1990 to 2010, the RBA’s cash rate journey reflected a shift towards inflation targeting and market-based policy. After the early 1990s recession, when rates were sharply lowered to support a flagging economy, the Bank pursued stable and moderate settings throughout the late 1990s under its newly formalised inflation-targeting regime. The early 2000s saw modest adjustments as the economy grew steadily, with the RBA fine-tuning rates in response to both domestic conditions and global developments.
Mid-decade, rising commodity prices and a strengthening resource sector prompted gradual increases aimed at pre-empting inflation. However, the onset of the Global Financial Crisis in 2008 triggered swift and significant cuts to protect growth and maintain financial stability. By 2010, Australia’s cash rate had largely returned to moderate levels, underscoring the RBA’s focus on balancing inflation control with economic resilience.
RBA Cash Rate 1960-1990
From 1960 to 1990, the Reserve Bank of Australia’s official interest rates moved from low, steady settings under a regulated financial system to historically high levels amid deregulation and inflationary pressures. In the 1960s, rates remained relatively stable as the economy grew steadily with low inflation. The 1970s brought global financial turmoil, rising oil prices, and increased inflation, prompting the RBA to raise rates more aggressively, though still within a tightly controlled system.
By the 1980s, widespread financial deregulation gave the RBA greater flexibility but also exposed Australia to international volatility. Rates rose and fell more sharply as the Bank strove to combat inflation and overheated credit growth. This culminated in the late 1980s, when the cash rate reached exceptionally high levels—well into double digits. By the close of the decade, these measures had set the stage for the monetary policy reforms and lower inflation focus of the 1990s.
Struggling With Your Australian Property Buying Process?
-
Navigating the Australian property market from anywhere in the world can feel complex and overwhelming. We simplify your property journey at every stage. - Get tailored mortgage strategy—whether you’re buying, refinancing, or optimising your portfolio—so you can move forward with clarity and confidence, wherever you’re based.
- Get tailored Australian expat mortgage advice
4.9 | Based On 330+ Reviews
What is the RBA Interest Rate Forecast?
The RBA’s 2025 easing cycle (cash rate cut from 4.35% to 3.60%) reversed in 2026: three consecutive hikes took the cash rate back to 4.35% by May, driven by resurgent inflation and an oil-price shock tied to the Middle East conflict. The Board held rates steady at its June 2026 meeting to assess the impact of those hikes, while explicitly leaving the door open to further increases if inflation stays elevated.
Important Note: All interest rate projections remain conditional on incoming data — the RBA has stated it will do what’s necessary to bring inflation back to target, which could mean further holds, cuts, or hikes depending on how inflation and the labour market evolve.
Impacts of Rising Interest Rates
Higher interest rates have wide-ranging impacts across Australia:
- Mortgage holders will face increased repayment costs, affecting household budgets.
- Business borrowing will become more costly, potentially slowing investment.
- Consumer spending may decline as personal loans and credit cards require higher repayments.
- Economic growth could slow as borrowing and activity is reined in.
- The Australian dollar may strengthen as higher rates attract foreign capital.
- House price growth is expected to slow but no major crash is forecast.
- Share markets may see increased volatility. Some business profits could be squeezed.
- Unemployment may edge up if conditions weaken but is still trending low.
On the positive side, rising rates aim to bring inflation back down and prevent it becoming entrenched. This provides greater economic stability.
Who Sets Australian Interest Rates?
The Reserve Bank of Australia sets the nation’s interest rates through adjustments to the cash rate at its monthly board meetings.
The board is made up of senior RBA leaders like the Governor, Deputy Governor, Treasury Secretary and six independent experts from sectors like business, academia and farming.
They assess economic data and make rate decisions to meet the RBA’s core objectives of:
- Maintaining inflation within 2-3% on average over time
- Ensuring full employment where possible
- Contributing to Australia’s economic prosperity and welfare
The board analyses factors like GDP growth, inflation, unemployment, wages and household spending when setting rates. Their decisions impact the whole economy.
RBA Interest Rates: Final Summary
After hitting historic lows during COVID-19, Australian interest rates rose sharply through 2022–2023 as inflation surged. By late 2023, the RBA cash rate had reached 4.35%, where it then remained on hold throughout 2024 as the Bank focused on returning inflation toward its 2–3% target band.
In 2025, the RBA began gradually easing policy, cutting the cash rate from 4.35% down to 3.60% by August 2025, reflecting improving inflation conditions.
Mortgage Rates and Borrowing Costs
Variable mortgage and business lending rates have moved broadly in line with these shifts. Fixed mortgage rates, however, remain heavily influenced by bond markets and inflation expectations — meaning they do not always fall or rise directly with the RBA cash rate.
What This Means for Expats and Overseas Borrowers
For Australian expats living abroad — and foreign-income borrowers buying in Australia — interest rate movements still matter, but the bigger challenge is that lending conditions remain tight. Banks continue to assess borrowers using higher serviceability buffers, and expats are often impacted more due to:
foreign income shading
stricter liability assessment
currency and residency risk overlays
As a result, borrowing capacity and repayments can remain sensitive even in a lower-rate environment heading into 2026.
The Upside
The long-term benefit of tighter (and now stabilising) policy is that inflation is expected to gradually return closer to the RBA’s target band, supporting greater economic and mortgage-rate stability over time.
For expats and overseas investors, understanding the direction of Australian rates, alongside lender policy changes, is key to timing decisions, protecting borrowing power, and planning repayments prudently.
Get Expert Mortgage Rate Advice for Expats
If you’re an expat or foreign borrower considering a mortgage in Australia, get in touch with our expert team at Odin Mortgage. Our brokers can provide advice and solutions tailored to your unique situation and needs.
As specialists in expat and overseas borrower home loans, Odin Mortgage stays up to date with the latest RBA cash rate changes and interest rate movements. We help you secure the most competitive Australian mortgage rates and structure loans efficiently.
To discuss your Australian mortgage requirements, speak with one of our expat mortgage specialists today.
Get a free Australian mortgage assessment today.
FAQs about RBA Interest Rate History and Forecast
What role does the RBA serve in regards to interest rates?
The RBA affects interest rates in Australia by setting the official cash rate at its monthly meetings. In December 2023, the RBA decided to maintain the cash rate at 4.35%, leaving variable housing and business lending rates unchanged.
The RBA raises rates when inflation is high and lowers rates when inflation is low.
How many RBA meetings are there in a year and what do they discuss?
The RBA holds eleven scheduled meetings each year on the first Tuesday of every month except January. In these meetings, the RBA Board decides on interest rates by setting the target for the cash rate.
They analyse economic factors like growth, inflation, unemployment and wages to guide rate decisions that aim to meet inflation goals.
What reasons are there for the RBA to increase interest rates?
The RBA typically increases interest rates when inflation is above the 2-3% target band. Reasons inflation may rise include:
- Increased consumer spending and business activity driving up overall demand
- Rising wages growth pushing up costs for businesses
- Supply constraints and production bottlenecks causing prices to increase
- Higher import costs flowing through to Australian prices
By lifting rates, the RBA aims to reduce spending and slow inflation back down towards more acceptable levels over time.
When does the RBA announce its cash rate decisions?
The Reserve Bank typically meets on the first Tuesday of each month (except January) to review and set the cash rate. The decision is announced at 2:30 pm AEST/AEDT on the day of the meeting.
What is the highest cash rate the RBA has ever set?
Historically, the RBA’s official interest rate peaked in the late 1980s, when it briefly exceeded 17%. This occurred as the Bank attempted to combat very high inflation during an overheating economy.
When did the RBA introduce historically low rates, and why?
Record-low rates (around 0.10% to 0.25%) were introduced in response to weaker economic conditions, especially during the COVID-19 pandemic. The RBA lowered rates to support employment, keep inflation on target, and help stabilise financial markets.
How do analysts forecast future RBA rate movements?
Economists and market watchers closely study inflation data, employment trends, wages growth, and global economic conditions. They also track signals from the RBA Board and compare them with market expectations (such as bond yields) to predict rate moves.
See What You Qualify For
Get Immediate Insights on Your Mortgage Eligibility Discover your mortgage eligibility instantly"*" indicates required fields
Add Your Heading Text Here
