Rate guide
Australian loan interest rates, explained
General market information as at August 2026 — what the cash rate does, what a comparison rate actually means, and roughly where different types of lending sit. None of these are offers of credit.
Where the cash rate sits
The Reserve Bank held the cash rate at 4.35% on 11 August 2026. That followed three consecutive increases in February, March and May which took it from 3.60% to 4.35%, unwinding the cuts made during 2025.
Headline inflation was running at 3.8% at the time of the decision, still above the RBA's 2–3% target band, and the Bank does not expect it to return to around the mid-point until late 2027. Unemployment sat at roughly 4.4%. The Board's language has stayed cautious: policy is described as somewhat restrictive, with a further increase not ruled out if inflation proves stubborn. The next decision is due 29 September 2026.
For borrowers the practical read is simple. Rates are unlikely to fall soon, the major banks broadly expect cuts only from 2027, and any borrowing decision should be made on the basis of what you can afford at today's rate.
The comparison rate, and why it exists
Under the National Credit Code, an Australian lender advertising an interest rate for a regulated consumer credit product must also publish a comparison rate, and it has to be displayed at least as prominently as the headline rate.
The comparison rate combines the interest rate with most standard fees into one figure. Two loans both advertising 9.5% look identical until you notice one charges $800 in upfront fees and the other charges $100 — the comparison rate exposes that immediately.
It's calculated on a standard reference loan: $30,000 over five years for personal loans, $150,000 over 25 years for loans secured against property. Because the reference amount is fixed, the comparison rate on a $700,000 mortgage won't reflect your actual cost precisely. Treat it as a like-for-like sorting tool.
Indicative market ranges
The figures below are broad market ranges compiled from published sources in August 2026. They exist to give you a sense of scale, not to predict what you'd be offered.
| Type of lending | Indicative range (p.a.) | Notes |
|---|---|---|
| Owner-occupier home loan (variable) | ~5.7% – 7.0% | Average variable around 6.9%; lowest advertised near 5.7% |
| Investment home loan (variable) | ~5.9% – 7.5% | Average variable around 7.2% |
| Secured personal loan | ~6.0% – 15% | Usually vehicle-secured; age limits apply |
| Unsecured personal loan | ~6.0% – 27%+ | Average near 10.3% for excellent credit; risk-based |
| Secured business loan | ~6.8% – 9.5% | Typically property-secured |
| Unsecured business loan | ~9.5% – 18% | Commonly capped near $250,000 |
| Short-term business / merchant advance | 30%+ effective | Often quoted as a factor rate — convert before comparing |
| Credit card (purchases) | ~18.6% average | The benchmark most consolidation is measured against |
What actually determines your rate
Security. The single biggest factor. Secured lending prices several percentage points below unsecured, because the lender has an asset to recover.
Credit history. Australian lenders use comprehensive credit reporting, which covers well over 90% of active accounts and includes repayment history month by month. Pricing is banded by risk.
Income stability. Long-tenure PAYG employment is assessed most easily. Recently self-employed income takes more documentation and often prices higher.
Existing commitments. Credit card limits reduce assessed capacity even at a zero balance. Closing cards you don't use is one of the few quick wins available.
Lender type. Non-bank and digital lenders frequently price below the major banks for prime borrowers, and above them for higher-risk profiles.
A note on serviceability buffers
Lenders don't assess you at the rate you'll pay. They assess you at that rate plus a buffer — generally around three percentage points under APRA guidance. A loan advertised at 6.25% is typically tested at roughly 9.25%. This is why borrowing capacity often comes in lower than people expect, and it's built into the borrowing power calculator on our calculators page.
Since 1 February 2026, APRA has also required banks to limit new mortgages where total debt exceeds six times income to no more than 20% of new lending, applied separately to owner-occupier and investor books.
Independent sources worth using
We'd rather you checked our figures than took them on faith:
FAQ
Rate questions
What is the RBA cash rate right now?
The Reserve Bank held the cash rate at 4.35% at its meeting on 11 August 2026 — the second consecutive hold after three increases in the first half of the year. The next Board meeting is scheduled for 29 September 2026. Always check rba.gov.au for the current figure.
Why is my loan rate so much higher than the cash rate?
The cash rate is the overnight rate between banks. Your rate is that cost of funds plus a margin covering the lender's risk, capital requirements, operating costs and profit. Unsecured lending carries a much larger margin than secured lending because the lender has no asset to recover — which is why a mortgage might sit near 6% while an unsecured personal loan sits in double digits.
What is a comparison rate?
A single percentage that combines the interest rate with most standard fees, so you can compare products fairly. Australian law requires lenders to display it wherever they advertise a rate, calculated on a standard reference loan — $30,000 over 5 years for personal loans, $150,000 over 25 years for secured property loans. Because it uses a fixed reference amount, it won't match your loan exactly. It's a sorting tool, not a quote.
Will rates come down?
Nobody knows, and be sceptical of anyone who says otherwise. As at August 2026 the four major banks broadly expect the next move to be a cut, but not until 2027, and the RBA has explicitly kept the door open to a further increase if inflation re-accelerates. Borrow on the basis of the rate you can afford today, not the one you hope arrives.
Want to know where you'd actually land?
Market ranges only tell you so much. We can give you an indicative position based on your real circumstances.
Checking your options does not affect your credit score. A credit check is only done if you decide to apply with a lender.