RBA lifts cash rate to 4.60%: what it means for your rental cash flow

On 29 September 2026 the Reserve Bank's Monetary Policy Board raised the cash rate target by 0.25 percentage points to 4.60% (RBA statement). It's the fourth increase this year, so the cash rate is a full percentage point higher than it was in January.

The Board pointed to inflation running above expectations, with higher global energy prices and domestic capacity constraints among the pressures. It also said it's prepared to raise rates further if needed.

For property investors, the question isn't just "how much more will I pay?" It's "what does this do to each property's bottom line, and to my tax position from 2027?"

How much more interest are you paying?

On an interest-only investment loan, the maths is simple:

• $400,000 loan: each 0.25% rise adds about $1,000 a year in interest. The full 1% rise this year adds about $4,000 a year.
• $600,000 loan: about $1,500 a year per 0.25% rise, or $6,000 a year for the 1% rise.
• $800,000 loan: about $2,000 a year per 0.25% rise, or $8,000 a year for the 1% rise.

These figures assume your lender passes the rise on in full and you're on a variable rate. Principal-and-interest repayments rise by slightly less in interest terms, but your total repayment still goes up. If you're on a fixed rate, the impact arrives when your fixed term ends, so check your roll-off dates now.

Why this matters more in 2027

The negative gearing changes passed this year take effect from 1 July 2027 (ATO):

• Grandfathered properties: if you held the property before 7:30pm AEST on 12 May 2026, the existing negative gearing rules continue.
• New builds: losses can still be offset against other income.
• Established properties bought after the cut-off: from 1 July 2027, net rental losses can generally only be used against residential property income, not your salary. Unused losses are carried forward.

Higher interest makes losses bigger. On a post-budget established property, a bigger loss doesn't reduce your tax bill this year. It's carried forward instead, so your out-of-pocket cash flow takes the full hit.

That makes it important to know which bucket each property sits in and whether it's positively or negatively geared at today's rates.

Keep the records that prove which bucket you're in

Grandfathering turns on timing, so keep the evidence together now while it's easy to find:

• The signed contract of sale, showing the contract date and time, not just settlement.
• For new builds: the build contract, occupancy certificate and construction invoices.
• A market valuation as at 1 July 2027, to support the CGT split between pre- and post-2027 gains. Diarise it now.

A five-step rate-rise check

1. Update each loan's interest rate once your lender confirms the new rate.
2. Check fixed-rate expiry dates and note any rolling off in the next 12 months.
3. Recalculate net cash flow per property: rent minus interest, rates, insurance, strata, management and maintenance.
4. Identify each property's negative gearing status: grandfathered, new build or post-budget established.
5. Review rent against the market at your next lawful rent review. In most states and territories increases are limited to once every 12 months, with notice.

How PropKeeper helps

• Loans and rate alerts: record each loan and its rate, and get dashboard alerts on your mortgages.
• Cash Flow Pulse: see rental income against costs across your portfolio at a glance.
• Negative gearing status: each property is tagged as grandfathered, new build or post-budget established, so you know which rules apply.
• Quarantined loss tracking: for post-budget established properties, PropKeeper tracks losses carried forward under the 2027 rules.
• Tax Report: categorised income and expenses, including interest, ready for your accountant at EOFY.

Start your free 30-day trial and see each property's cash flow and negative gearing status in one place. See also: features and pricing.

This article is general information only, not financial or tax advice. Your situation may differ; speak to a registered tax agent or licensed financial adviser before acting.