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The Reserve Bank of Australia raised the cash rate by 0.25 percentage points to 4.35% on 5 May 2026 — the third consecutive hike in 2026 and a return to the November 2023 peak. All four major banks confirmed full pass-through to variable customers. Average variable rates are now approximately 7.14%
The cash rate is 4.35% following the RBA's decision on 5 May 2026. This is the third consecutive hike in 2026 and matches the November 2023 peak rate.
The three 2026 hikes total 0.75 percentage points above the December 2025 trough. On a $600,000 loan this adds approximately $276/month or $3,312/year.
Markets are pricing approximately 70% probability of a hold at the June 16–17 meeting and 20% probability of a further hike to 4.60%. A pause is the most likely outcome, depending heavily on CPI and employment data released in May.
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