The RBA Cash Rate Explained: How It Affects You

RBA charges a rate on unsecured overnight loans between banks. The RBA cash rate increase is to balance the economic stability. Here’s how it may affect you.

The Reserve Bank of Australia (RBA), Australia's central bank meets throughout the year to discuss economic growth indicators that influence the banking system in the Australian economy - one of these is the ‘official cash rate’, also known as OCR.

What is the Official Cash Rate?

The official cash rate is the interest rate charged on unsecured overnight loans between banks. In simple terms, it’s how much it costs banks to borrow from each other.

When does the RBA meet?

The Reserve Bank of Australia’s board meets eleven times a year, on the first Tuesday of every month, except in January.  

Why does the RBA change the cash rate?

At each meeting, the RBA decides whether to increase or decrease the cash rate target to balance economic stability, whilst protecting and promoting financial prosperity for Australia.

The recent cost of living pressures, also known as inflation, have encouraged the RBA to increase the cash rate to counter this inflation. By making it more expensive for Aussies and businesses to borrow money, it reduces overall demand for products and services. This helps reduce prices as supply is greater than demand.

Why does the RBA cash rate increase affect my interest rate?

The RBA’s decision to increase the official cash rate makes it more expensive for lenders to borrow money – a key consideration for how lenders price their loans. Learn more about how interest rates are determined here.

What does Unloan do when the cash rate changes?

When the RBA decides that the cash rate decreases or increases Unloan reviews the impact on our Live-In and Invest interest rates. We’ll communicate any changes to our own interest rates that could impact your monthly repayments on our website, and via email.

We remain committed to providing Aussies with a home loan that’s easy to get, and easier to live with. Learn more about our award winning value here.

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