Why home loan rates move: the RBA cash rate and what lenders pass on

What the cash rate is

The RBA's Monetary Policy Board sets a target for the cash rate, the interest rate on overnight loans between banks. The RBA says the board sets policy independently of the political process. A change in the target passes quickly through to other interest rates, and the RBA notes that most Australian deposits and loans are at variable or short-term fixed rates, so there is a high pass-through. It also says lending rates "do not always move in lockstep" with the target.

On RateSonar's data, the cash rate target is 4.60% and has been since 30 Sep 2026, when it moved up 0.25 percentage points from 4.35%. The rate history page shows the RBA series back to 1959, labelled as market context, not as a lender's quote.

Why lenders do not move in step

The RBA decides the cash rate. Your lender decides your variable rate. Lenders can respond to the cash rate, their own funding costs, competition and their business plans. Each lender announces its own changes and effective dates, and they can differ by days or weeks and by amount. A lender can also change a rate for new customers and not for existing customers, or the reverse. RateSonar records advertised rates, so it shows what lenders list for new borrowers, not what existing customers pay.

See who moved, in the data

RateSonar compares consecutive records of each product and lists each rate move. The rate changes page shows who moved, which way, and by how much, newest first. In the 3 Oct 2026 to 1 Nov 2026 window RateSonar recorded 949 home loan rate changes across 97 lenders: 930 rises and 19 cuts. (These are product-level rate changes. One lender can change several products at once.)

To check your own lender:

1. Open rate changes and look for your lender's name.
2. Open its page, for example Commonwealth Bank, Westpac, NAB or ANZ, and check the products and rates it advertises.
3. Open rate history to see how its advertised rate has moved since RateSonar began recording in June 2026.
4. If other lenders have moved and yours has not, or yours has moved less, use that when you ask for a lower rate.

What a move is worth

A quarter of a percentage point is the size of a typical RBA step. On a $600,000 loan over 30 years at the middle advertised variable rate of 6.74%, a quarter of a point is worth about $99 a month ($1,190 a year), by RateSonar's arithmetic with the rate held constant. That is the size of the repayment change when your lender passes on a move of that size, and the size of what you give up if it does not pass on a cut.

What markets expect

The rate outlook page reads what bond prices (and ASX futures when available) imply for the RBA cash rate. It is the market's reading, not a RateSonar forecast, and it can be wrong. Do not time a loan decision on it alone. Fixing a rate or staying variable is a trade-off about certainty, not a prediction. See fixed vs variable.

What to do after an RBA decision

• Check the rate changes page over the following days.
• If rates fall, ask your lender whether and when it will pass the cut on, and check your repayment.
• If rates rise, check you can afford the new repayment, and consider whether to ask for a better rate or compare lenders.
• Keep any extra repayments or offset balance working. See how offset accounts work.