Another RBA Rate Rise Is Now the Base Case — What It Means for Your Business Loan

This article will be updated within 24–48 hours of the Reserve Bank's 29 September decision with the confirmed outcome.

On 29 September, the Reserve Bank's Monetary Policy Board makes its next cash rate decision. For the first time in three months, a rate rise is a genuine possibility — not a formality everyone expects to be a hold.

The cash rate has sat at 4.35% since May, held steady through June, July and August — and the picture on what happens next has been shifting fast, with market pricing for a September move climbing sharply in the past fortnight.

If you're carrying a variable business loan, an overdraft, or equipment finance on a floating rate, this isn't background economic noise. It's a decision that can move your repayments within weeks, and it's worth understanding what's actually on the table before it lands — not after.

Key takeaways

• The Reserve Bank's next cash rate decision lands on 29 September 2026, announced at 2:30pm Sydney time.
• The cash rate has been at 4.35% since May 2026 — the third hike of the year — and has been held at every meeting since.
• The Reserve Bank's own August Statement on Monetary Policy put the market-implied chance of a further rise by year's end at roughly 50% — but market pricing for a September move specifically has risen sharply since, following hotter-than-expected inflation data released later in August.
• Major banks have been converging rather than staying split: NAB was first to call a September move, ANZ and CBA have pointed to November, and Westpac — the last holdout expecting no further hike at all — has reportedly also shifted toward expecting one, leaving timing (not whether) as the main open question.
• Variable-rate lending has long made up roughly two-thirds of Australian business loans, so a cash rate move flows through to most existing business debt relatively quickly — though each lender sets its own rates independently and doesn't always move in lockstep with the Reserve Bank.

What's actually happening on 29 September

The Reserve Bank of Australia's Monetary Policy Board meets on 28–29 September 2026, with the decision announced at 2:30pm Sydney time on the 29th.

The cash rate has been at 4.35% since the Board's May 2026 meeting — its third increase of the year — and has been held steady at the June, July and August meetings since. In its August Statement on Monetary Policy, the Reserve Bank put the market-implied probability of a further rise by the end of 2026 at roughly 50%, based on how financial markets were pricing the outlook at the time.

The picture has moved since. Inflation data released in late August showed underlying (trimmed mean) inflation holding above the Bank's comfort zone, hotter than markets expected, and market pricing for a September move has reportedly climbed well above that August baseline as a result. NAB was first to call a September rise specifically; ANZ and CBA have pointed to November instead. Westpac held out longest, forecasting no further rise through 2026 — but the most recent reporting has Westpac also shifting toward expecting a hike, which would leave all four majors agreeing a rise is coming and disagreeing only on timing. Given how quickly this has moved, treat the bank-by-bank positions as a snapshot, not a settled picture.

Why this is a genuine two-way call, not a prediction

The Reserve Bank's own reasoning, from its August statement, explains why economists are split. Inflation remains above the Bank's target range and isn't expected to return to the middle of that range until early 2028. At the same time, the unemployment rate has increased a little through the year and is expected to keep rising gradually — a sign the economy is already slowing under the weight of this year's earlier rate rises.

Higher energy prices linked to the Middle East conflict have added further pressure on inflation, even as the labour market shows early signs of cooling. Those two forces point in different directions for the Board's decision — exactly why the Reserve Bank held in August rather than moving immediately, and why September remains genuinely unresolved rather than a foregone conclusion either way.

What a further rise actually does to a business loan

A 25 basis point rise on a $200,000 variable business loan adds roughly $500 a year in interest, before accounting for how the specific facility is structured. The exact figure depends on your rate, your repayment structure, and the size of the facility itself.

That matters more broadly than it might first appear. Variable-rate lending has long made up roughly two-thirds of business loans in Australia, per the Reserve Bank's own analysis of lending patterns, which means a cash rate change flows through to the majority of existing business debt relatively quickly — not just to a small subset of borrowers.

A rate change also affects how much you can borrow, not just what you repay. Lenders build a serviceability buffer into how they calculate your borrowing limit, and that buffer moves as the cash rate does.

If you're carrying variable-rate debt — an overdraft, a variable-rate business loan, or equipment finance on a floating rate — it's worth running the numbers on what a further 25 or 50 basis points would do to your specific repayments and loan covenants before the decision lands, rather than working it out afterwards.

Lenders don't all move together

The Reserve Bank sets the cash rate target — it doesn't set the interest rate on your business loan directly. The cash rate has what the Reserve Bank itself describes as "a strong influence" over lending rates, because it affects the cost of funding for every bank and non-bank lender in the market. But each lender makes its own decision about if, when, and by how much to adjust its own rates — some move within days, others take longer, and the size of the adjustment isn't always identical to the cash rate move itself.

This is also where a broker's vantage point is genuinely useful rather than incidental. Across Broc Finance's panel of 150+ lenders, rate movements are rarely uniform. Some lenders reprice ahead of a widely expected decision, others wait for confirmation, and a handful hold steady on existing facilities while adjusting only for new lending. Knowing which lenders are doing what matters more once a decision has actually landed than it does today.

Fixed vs variable, in a rising-rate environment

There's no universally correct answer here — only a trade-off worth understanding clearly.

A variable rate moves with the market in both directions: cheaper if rates fall or hold, more expensive if they rise further. A fixed rate locks in certainty for the term of the fix, which is valuable if you expect further rises, but it also means you don't benefit if rates ease later — and most fixed business loan products carry break costs if you need to exit early.

The decision usually comes down to how much certainty you need for cash flow planning versus how much flexibility you want to keep. A business with tight margins and little room to absorb a rate increase may reasonably value the certainty of a fixed rate more than the potential upside of a variable one. The reverse is also a reasonable position, depending on your appetite for the risk.

This is also a good moment to revisit any ATO debt you're carrying on a payment plan. The general interest charge on unpaid tax compounds daily regardless of what the cash rate does, so the relative cost of clearing it with a loan versus letting a payment plan run shifts as rates move.

[To be updated after the 29 September decision]

This section will be updated within 24–48 hours of the Reserve Bank's announcement with the confirmed outcome and what it means in practice for business borrowers. Check back after 29 September, or ask us directly for the result once it's confirmed.

Either way, know your number before the decision lands

Whichever way the Reserve Bank moves on 29 September, the mechanics don't change. Variable-rate business debt is exposed to the decision, lenders will respond in their own time and their own way, and the fixed-versus-variable trade-off is worth understanding on its own terms rather than deciding in a hurry once the outcome is known.

If you want a read on what either outcome means for your specific facility once the decision lands, a conversation with a Broc Finance lending specialist costs nothing and doesn't commit you to anything.

Frequently asked questions

When is the next RBA interest rate decision?

The Reserve Bank of Australia's Monetary Policy Board meets on 28–29 September 2026, with the decision announced at 2:30pm Sydney time on the 29th.

Will the RBA raise interest rates again in 2026?

It's genuinely uncertain, though the odds have shortened. The Reserve Bank's own August statement put the market-implied chance of a further rise by year's end at roughly 50%; market pricing has reportedly climbed well above that since, following hotter-than-expected inflation data later in August. NAB has called for a September move specifically, ANZ and CBA point to November, and Westpac — the last holdout — has reportedly also shifted toward expecting a rise, leaving timing as the main open question.

How does an RBA rate rise affect business loans?

Variable-rate lending has long made up roughly two-thirds of Australian business loans, so a cash rate rise generally flows through to loan repayments — though the timing and size of the change depends on each individual lender's own decision.

Should I fix my business loan interest rate?

It depends on how much certainty you need for cash flow planning versus how much flexibility you want to keep. A fixed rate protects against further rises but usually carries break costs if you exit early; a variable rate benefits if rates fall or hold.

Do all lenders raise rates when the RBA does?

No. The Reserve Bank sets the cash rate target, but each lender independently decides if, when, and by how much to adjust its own rates. Some move quickly, others take longer, and the size of the change isn't always identical to the cash rate move.