Eight weeks. Two rate rises. And if the big four banks are right, a third is coming in May, which would wipe out every rate cut delivered throughout 2025.
Today, the Reserve Bank of Australia confirmed the official cash rate has risen by 25 basis points to 4.10%. For Perth households still absorbing February’s hike, it’s the news nobody wanted. Fuel prices have surged past $100.00 a barrel off the back of the US-Israel conflict in Iran, pushing inflation further above the Reserve Bank of Australia’s target.
Higher interest rates are the Reserve Bank of Australia’s main tool for slowing inflation — the idea being that when borrowing costs rise, people spend less, and prices follow. So they say.
The vote was closer than you’d think
Let’s start with some good news.
This wasn’t a unanimous decision. Five board members voted to raise. Four voted to hold. In the February board meeting, the vote was unanimous.
That five-to-four split suggests the Reserve Bank of Australia isn’t operating with full confidence and that members within the boardroom believe increasing rates right now could do more harm than good. Obviously, interest rates don’t fix an oil supply crisis. It just makes your mortgage more expensive while you wait for one to be resolved.
What it actually means for your repayments
When the cash rate rises, variable rate mortgages typically follow within weeks. If you’re on a variable rate home loan, which most Perth borrowers are, expect your bank to pass this on shortly.
Here’s what two back-to-back 0.25% rises look like in dollar terms across common Perth loan sizes:
| Loan size | Extra per month (Feb) | Extra per month (today) | Total extra per month in 2026 |
|---|---|---|---|
| $500,000 | ~$79.00 | ~$80.00 | ~$159.00 |
| $850,000 | ~$134.00 | ~$136.00 | ~$270.00 |
| $1,000,000 | ~$158.00 | ~$160.00 | ~$318.00 |
Perth’s median house value is now sitting around $850,000. For the average Perth mortgage holder, that’s an extra $270.00 every month compared to where repayments sat at the start of the year.
Please Note: Figures are estimates based on a standard 30-year variable rate principal and interest loan, assuming full pass-through of the 0.25% rise by your lender, which is typical but not universal. Your actual repayment change will depend on your lender and loan structure. Speak to your broker or lender for figures specific to your situation.
Why Perth feels the hit a bit more than others
Perth’s property market has been one of the strongest in the country over the past two years, which means Perth borrowers are carrying some of the largest mortgages they have ever had. Average mortgage sizes in WA have grown significantly faster than in most other states.
Strong as the market has been, that growth now comes with a cost — larger loans mean rate rises hurt more here than they might elsewhere.
What’s coming next from the Reserve Bank of Australia
The Reserve Bank of Australia has signalled it will continue watching the data closely, with the Middle East conflict and its impact on fuel prices the wildcard. All four major banks are now predicting another 0.25% rise at the May meeting, which would take the cash rate to 4.35%.
If that happens, it would erase every rate cut delivered throughout 2025 — three cuts that many Perth households had welcomed and were counting on heading into this year.
However, with a boardroom divided on the vote to increase rates five to four, there could be hope for the months ahead.
