Mortgage Rate Change Calculator
How to Use This Calculator
Enter your current loan amount, interest rate, and loan term, then watch the results table update instantly to show your monthly repayments across a range of rates — both above and below your current rate. The difference column shows exactly how much more or less you'd pay each month compared to your current rate.
Try it with a real example: on a $600,000 loan over 25 years at 5.50%, a 0.25% rate rise adds around $89 per month to your repayments — that's $1,068 extra per year. A full 1% increase adds approximately $360 per month, or $4,320 annually.
Your Details
Results
| Annual Interest Rate | Monthly Instalment | Difference |
|---|---|---|
| 4.50% | $6,326 | -$552 |
| 4.75% | $6,462 | -$417 |
| 5.00% | $6,600 | -$279 |
| 5.25% | $6,738 | -$140 |
| 5.50% | $6,879 | $0 |
| 5.75% | $7,021 | $142 |
| 6.00% | $7,164 | $285 |
| 6.25% | $7,309 | $430 |
Why Rate Changes Matter Right Now
The Reserve Bank of Australia (RBA) increased the cash rate three times in 2026 — in February, March, and May — returning the cash rate to 4.35%. This reversed the three cuts delivered in 2025, meaning Australian mortgage holders have effectively lost the repayment relief they gained last year. Variable rate home loans now start from around 5.35% with most major lenders passing on the full increases.
With economists divided on whether further hikes are coming, understanding how each potential move affects your repayments is more important than ever. This calculator lets you model any scenario — from a further 0.25% rise to a potential future cut — so you're never caught off guard.
Fixed vs Variable: Which Is Right for You?
If you're on a variable rate, every RBA decision directly affects your repayments, usually within a month. If you're on a fixed rate, you're protected until your fixed period ends — at which point you'll roll onto your lender's current variable rate, which could be significantly higher than when you fixed.
Many Australian borrowers opt for a split loan — fixing a portion for repayment certainty while keeping the rest variable for flexibility, extra repayments, and offset account access. Use this calculator to model what each portion of a split loan would cost at different rates.
How to Reduce the Impact of Rate Rises
- ✓Make extra repayments: Even small additional payments reduce your principal faster, meaning less interest accrues when rates rise.
- ✓Use an offset account: Every dollar in your offset reduces the balance interest is calculated on — effectively the same as making an extra repayment but with the flexibility to access the funds.
- ✓Negotiate with your lender: Banks regularly offer retention discounts. Calling your lender and asking for a rate review often results in a reduction without refinancing.
- ✓Refinance: If your current rate is significantly above the market, refinancing can save thousands annually. Non-bank lenders often offer more competitive rates than the big four.
Frequently Asked Questions
How does an interest rate change affect my mortgage repayments?
When interest rates rise, more of each repayment goes toward interest rather than reducing your principal, meaning your monthly payment increases. On a variable rate loan, your lender will typically adjust your repayment amount within one to two months of a rate change. On a fixed rate loan, your repayments stay the same until your fixed term ends.
What happens to my mortgage if the RBA raises rates by 0.25%?
A 0.25% rate increase adds approximately $15 per month for every $100,000 of your remaining loan balance. On a $600,000 loan, that's around $89 extra per month, or about $1,068 per year. Use the calculator above to see the exact impact for your loan amount and term.
How much does a 1% interest rate change cost on a $500,000 mortgage?
On a $500,000 loan with 25 years remaining, a 1% rate increase adds approximately $300 per month to your repayments — around $3,600 per year. The exact figure depends on your remaining loan term and current rate, which you can calculate precisely using the tool above.
Should I fix my rate or stay variable in 2026?
With the RBA cash rate back at 4.35% following three hikes in 2026, this is a key decision for Australian borrowers. Fixing provides repayment certainty but removes flexibility and typically comes with break costs if you exit early. Most economists expect the RBA to hold rates steady for the remainder of 2026, which may make variable rates the better long-term bet — but your decision should factor in your personal cash flow, risk tolerance, and how long you plan to hold the loan.
What is the difference between a fixed and variable rate mortgage?
A variable rate mortgage moves with market interest rates — when the RBA raises or cuts the cash rate, your lender will typically adjust your rate accordingly. A fixed rate mortgage locks your interest rate for a set period (usually one to five years), giving you repayment certainty regardless of what the RBA does. Fixed rates often come with restrictions on extra repayments and offset accounts.
What is the RBA cash rate and how does it affect my home loan?
The RBA cash rate is the interest rate the Reserve Bank of Australia sets for overnight loans between banks. It acts as the benchmark for all lending rates in Australia. When the RBA raises the cash rate, banks' borrowing costs increase and they typically pass that on to variable rate mortgage holders within weeks. The current RBA cash rate is 4.35% as of May 2026.
Related Tools
- Debt Repayment Calculator — see how to pay off debt faster
- How to Pay Off Your Home in Half the Time — offset account strategy
- What is Amortization? — understand how your repayments are structured
- What is Compound Interest? — the maths behind your mortgage
Mortgage Rate Change Calculator Features
- Interactive loan amount adjustment from $0 to $2,500,000
- Interest rate comparison from 0% to 10%
- Loan term options from 1 to 30 years
- Real-time payment calculation updates
- Visual comparison of payment differences