NAB to raise rates, Commonwealth Bank, Bendigo Bank ‘reviewing’ home loan prices, more expected to follow
Mortgage holders are on tenterhooks following the Reserve Bank of Australia (RBA)’s far-from-unanimous decision to hike the overnight rate by 25 basis points to 4.1% on Tuesday.
It marks the second rate rise in as many months, as the RBA attempts to wrest control over spiralling inflation – an unenviable job made harder by soaring petrol prices in the wake of the erupting Middle East conflict.
NAB was the first of the majors to announce that it is passing through the 25-basis-point rate increase to borrowers, The changes will go live on 27 March.
“We know another rate increase will be challenging for many Australians, particularly in the context of ongoing cost-of-living pressures," said NAB group executive, personal banking Ana Marinkovic. “Many customers have built buffers over time by paying more than the minimum when they can, which can provide some breathing room as rates rise. But we know that won’t be the case for everyone.”
Commonwealth Bank, Australia’s largest home lender, is “reviewing” its home loan rates “and will share an update soon”.
“As the official cash rate is only one factor in our cost of funds, CommBank will review interest rates on all products and make an announcement in due course,” said CBA.
Bendigo Bank has also teased a repricing, saying: “We’re reviewing our interest rates following the RBA’s change to the cash rate and will keep you updated.”
More banks are expected to reassess their home loan rates following today’s decision.
It leaves Australian homeowners with the prospect of higher monthly repayments if and when lenders pass through higher costs of capital to consumers.
Canstar estimates that today’s 0.25 point increase will take the average owner-occupier variable rate above 6%, marking the first time the average has been above the 5% band since April 2025.
For a borrower with a $600,000 loan and 25 years left, that would lift minimum monthly repayments by about $91. Taken with the prior rate increase, the combined effect would be about $181 a month.
Broking industry reacts to RBA call
“The RBA’s decision to lift the cash rate came as no surprise and was entirely expected,” said outsource Finance chief executive Tanya Sale (pictured, right). “The RBA itself has flagged a ‘material risk’ that inflation will stay above target for longer than previously anticipated, which leaves very little room for a pause. Given these conditions, I don’t see a rate cut on the horizon anytime soon.”
Broker association the Mortgage and Finance Association of Australia (MFAA) warned that this latest rate rise will place even further pressure on struggling households.
“The reality is that higher borrowing costs are now becoming a feature of the economic environment,” said Anja Pannek (pictured, left), chief executive of the MFAA.
Pointing to softening borrower confidence in the MFAA February 2026 Market Sentiment Survey, Pannek said borrowers have already become more cautious in a new cycle of higher interest rates and cost-of-living pressures.
Her comments echo those of Peter White (pictured, centre left), the outgoing chief executive of the Finance Brokers Association of Australia (FBAA), who warned that many mortgage holders may struggle to meet increased mortgage payments, especially first-home buyers.
Mark Haron (pictured, centre right), executive director at mortgage aggregator Connective, also warned that borrowers should be prepared for the possibility of further tightening “if conditions don’t ease”.
“Another 25 basis points will affect households already managing higher living costs and larger loan sizes,” said Haron. “Brokers therefore need to step in early, helping clients stress‑test repayments, strengthen budgets and make sure their loan structures can hold up if conditions tighten further.”
Pannek also recommended reaching out to a broker.
“Mortgage brokers are well placed to help borrowers review their loan structure, negotiate better rates with their existing lender or explore refinancing options across the market,” she said. “In a more complex lending environment, brokers play an important role in helping borrowers understand their options and make informed financial decisions.”
