May 2026 RBA Rate Decision: 0.25% Increase to 4.35%

At its May 2026 meeting, the Reserve Bank of Australia raised the cash rate by 25 basis points to 4.35%. This is the third consecutive hike - following moves to 3.85% in February and 4.10% in March - and brings the rate back to its 2024 peak. The decision was passed 8-1, with one board member preferring no change.

The board cited a material lift in inflation through the second half of 2025, capacity pressures across the economy, and firms signalling further price increases. The statement also pointed to sharply higher fuel and related commodity prices from the Middle East conflict and "early signs" of second-round pricing effects flowing through goods and services. Underlying inflation is now expected to peak higher than the RBA forecast in February.

What this means for borrowers

Variable rate mortgage holders will see their repayments rise once their lender passes the increase through - typically within one billing cycle. On a $600,000 loan with 25 years remaining, this latest 25 basis point rise (5.84% to 6.09%) adds approximately $92 per month to repayments. Compounded across the three hikes since February - lifting a typical variable rate from around 5.34% to 6.09% - that's about $272 a month more than borrowers were paying at the start of the year.

• Review your rate. If you haven't compared your loan in over 12 months, now is the time. The best available rates can be 50 basis points or more below what existing customers are paying.
• Maximise your offset. Every dollar in your offset account is now saving you interest at a higher rate. See the impact with our Budget & Offset Calculator.
• Plan for further moves. The board said it remains "attentive to the data" and is "well placed to respond" - leaving the door open for further hikes if inflation doesn't ease. Stress-test your budget against a 4.60% cash rate scenario.

At Loan Hive, we help Gold Coast borrowers navigate every stage of the rate cycle. If you'd like a no-obligation review of your current loan, get in touch today.

Cash rate - 10 year history

All cash rate movements

Every RBA board decision - hikes, cuts and holds. Links to the RBA media release and board minutes are included where available.

Source: RBA Cash Rate Target · updated after each RBA meeting