Flourish Health & Wellbeing eMag - Latest Edition - Flipbook - Page 47
That followed a period of
stability at 3.60 per cent
through late 2025, after
a 0.25 percentage point
cut in August 2025 (down
from 3.85 per cent).
In plain terms, that
February 2026 increase
means many borrowers
on variable rates
can expect higher
repayments as lenders
pass the change on. For
example, Commonwealth
Bank announced it would
lift variable home loan
rates by 0.25 per cent
following the
RBA decision.
Australian interest rates
have a funny way of
turning everyday money
decisions into headline
news. One month,
everyone is holding their
breath for a rate cut. The
next, you are staring at
your home loan app like it
personally betrayed you.
What happened
in Australia
Here’s the good news:
you do not need to be
an economist to make
smart moves. Once you
understand how rate
The Reserve Bank of
Australia (RBA) increased
the cash rate target by
0.25 percentage points
to 3.85 per cent at its
February 2026 meeting.
changes 昀氀ow through
to your mortgage and
savings, you can make
practical decisions that
protect your budget and
keep your options open.
The key concept: the
cash rate is not your
mortgage rate, but it
in昀氀uences it
The cash rate is the
interest rate on overnight
money between banks.
It is not what you pay
directly. But it affects
bank funding costs, and
that often 昀氀ows into
variable home loan rates
and savings rates.
Fixed rates are a bit
different. They are
in昀氀uenced more by
wholesale funding
markets and expectations
about where rates are
headed, not just what the
RBA did this month.
