A timeline of Australian mortgage rate history, anchored to the RBA cash rate. Understanding past rate cycles puts the current environment in context — and reveals what may lie ahead.
The RBA cash rate has ranged from 17.5% at the height of the early-1990s recession to a record low of 0.10% during the COVID-19 pandemic. Variable mortgage rates track the cash rate closely — typically sitting 2–3 percentage points above it to cover lender margins and funding costs.
| Year / Period | Cash Rate | Approx Variable Rate | Era Summary |
|---|---|---|---|
| January 1990 | 17.5% | ~20% | Peak of anti-inflation tightening. Keating's "recession we had to have." Mortgage repayments on the average home consumed over 50% of household income. |
| 1993 | 4.75% | ~8% | Rapid easing as recession took hold. Rates halved within 3 years — a glimpse of what aggressive easing looks like. |
| 1996 | 7.5% | ~9.5% | Mid-cycle normalisation. Economy growing; rates recovered from post-recession lows. Property market recovering. |
| 2000 | 6.25% | ~8% | Pre-GST and Sydney Olympics. RBA began a series of hikes ahead of the early-2000s property boom. |
| 2002–2004 | 4.25–5.25% | ~6.5–7% | Early-2000s boom. Low rates and strong immigration drove Sydney and Melbourne prices sharply higher. |
| 2008 pre-GFC peak | 7.25% | ~9.5% | Last rate hike before the GFC. The RBA was tightening to control inflation when Lehman Brothers collapsed. |
| 2009 post-GFC trough | 3.0% | ~5.5% | Emergency cuts through late 2008 into 2009. Australia avoided recession partly due to China commodity demand and swift RBA action. |
| 2010–2011 | 4.75% | ~7.5% | Mining boom. Rates re-normalised quickly. Property prices rose sharply in 2010 before cooling. |
| 2016 record low (at time) | 1.5% | ~4.5% | The 1.5% rate held for 34 consecutive months (August 2016 – May 2019) — the longest unchanged stretch since the cash rate system began. |
| March 2020 COVID cut | 0.25% | ~3.5% | Emergency pandemic cut. Cut again to 0.10% in November 2020. |
| November 2020 all-time low | 0.10% | ~2.3–2.8% | Record low. RBA also implemented 3-year yield curve control. Unprecedented stimulus triggered a 25–40% property price surge in many markets. |
| May 2022 first hike | 0.35% | ~3.0% | Start of the fastest hiking cycle in Australian history. Inflation had surged to 7%+. First hike in over 11 years. |
| November 2023 cycle peak | 4.35% | ~6.5–7.5% | 13 hikes in 18 months, adding 4.25 percentage points. Average variable mortgage repayment increased by ~$1,500/month on a $600,000 loan. |
| February 2025 first cut | 4.10% | ~6.0–7.0% | First RBA cut since November 2020. Easing cycle begins as inflation returns toward the 2–3% target band. |
| Current (2026-04-16) | 4.1% | 6.0–7.0% | Gradual easing cycle in progress. Next RBA meeting: 5 May 2026. |
Source: RBA cash rate history (rba.gov.au). Variable rate approximations based on RBA Indicator Lending Rates data.
Variable home loan rates are not set directly by the RBA — lenders set their own rates based on funding costs, competitive dynamics, and target margins. However, in practice, variable rates move very closely with the cash rate. When the RBA raises by 0.25%, the major banks almost always pass it on in full within days. Rate cuts are passed on more slowly and sometimes only partially.
The gap between the cash rate and variable mortgage rates has narrowed over time. In the 1990s, standard variable rates were often 3+ percentage points above the cash rate. Today, competitive variable rates are approximately 1.5–2.5 percentage points above the cash rate, reflecting improved lender funding efficiency, online competition, and mortgage broker pressure.
Rule of thumb: Add 2–2.5% to the cash rate to estimate where competitive variable mortgage rates sit. With the cash rate at 4.1%, typical competitive variable rates are 6.10–6.60%. Big bank standard variable rates sit higher — typically 6.60–7.10%.
The 2020–2022 record low rate period lasted just over two years. The post-GFC low-rate era (2009–2022) lasted over a decade. Once rates fall, they tend to stay low for extended periods while central banks wait for economic conditions to warrant a change. The current easing cycle may unfold slowly — the RBA has signalled it will be "cautious and data-dependent."
The 2022–2023 hiking cycle was the most aggressive in Australian history — 13 hikes in 18 months. By contrast, the subsequent easing has been gradual. Rate pain arrives quickly; rate relief arrives slowly. This asymmetry matters significantly for borrowers who stretched their capacity near the bottom of the rate cycle.
The 2022–2023 hiking cycle demonstrated why fixed rates provide value during periods of rate risk. Borrowers on fixed rates through 2022–2023 were shielded from hikes; variable borrowers absorbed every increase immediately. The trade-off: fixed borrowers who rolled off their terms in 2023–2024 then faced much higher revert rates, creating a "fixed rate cliff" that hit cash flows hard.
A large volume of fixed-rate mortgages originated in 2020–2021 at rates below 2% rolled off to variable rates in 2023–2024. These borrowers — shielded from rate hikes during the fixed period — experienced payment shocks of $800–$1,500 per month when their fixed terms expired. This was a major driver of the mortgage stress surge through 2024.
The RBA cut the cash rate to 4.1% in early 2025, beginning the first easing cycle since 2020. Inflation has eased from its 7.8% peak (December 2022) to approximately 3.7% — still above the 2–3% target band but moving in the right direction. The RBA has adopted a cautious, data-dependent approach to further cuts.
Market pricing (as at early 2026) implies the cash rate will fall to approximately 3.5–3.75% by late 2027, suggesting variable mortgage rates could decline to approximately 5.5–6.0% over the next 18–24 months. However, rate forecasts beyond 12 months carry significant uncertainty.
Don't time the market: Attempting to predict rate movements and time your fixed/variable decision is difficult even for professional economists. A split loan — part fixed, part variable — is a pragmatic approach that provides certainty without sacrificing all flexibility. See our split loan calculator.
See how different rate scenarios affect your mortgage repayments.
Repayment Calculator →