Banks Begin Passing On the Rate Rise: What a $1M Owner-Occupier and Investment Loan Now Cost

Smaller Lenders Move First, the Big Four Are Expected to Follow

Within hours of the RBA's decision, Teachers Mutual Bank, UniBank and Australian Mutual Bank confirmed a full 0.25% increase on variable home loans, effective 12 November. Macquarie Bank confirmed the same increase, effective 19 November.

As of publication, Commonwealth Bank, Westpac, NAB and ANZ had not yet made an announcement. That is normal at this early stage. After September's hike, all four majors confirmed the increase within a day and had it applied to customer accounts within nine days. If that pattern holds, borrowers with a major bank should expect a notice within the coming week and the new rate in their account by mid-November.

A $1 Million Owner-Occupier Loan: What Changes

Most owner-occupiers repay their loan on a principal and interest basis, which means part of every repayment reduces the loan balance. On a $1,000,000 loan with 25 years remaining, this single 0.25% rise adds approximately $152 a month to the minimum repayment.

Stretched across the full 2026 hiking cycle, that same loan is now costing around $758 a month more than it was in January, or roughly $9,090 a year, assuming the lender has passed on every hike in full and the loan balance has not changed.

Use our repayment calculator to model your own loan balance and remaining term rather than relying on the $1,000,000 example above.

A $1 Million Investment Loan: Why It Moves Faster

Many investors hold their loan interest-only, which means the full repayment is interest and the balance never reduces on its own. This makes the maths simple and the hit more direct: on $1,000,000, a 0.25% increase adds exactly $1,000,000 multiplied by 0.25% and divided by 12, which comes to $208.33 a month. There is no amortisation schedule softening the blow the way there is for a principal and interest loan.

Across the full 2026 cycle, the same $1,000,000 interest-only loan is now costing $1,041.67 a month more than it was in January, a combined 1.25 percentage point increase applied directly to the balance. That is roughly $284 a month higher than the equivalent owner-occupier principal and interest loan sees, purely because of the repayment structure.

Tax treatment softens this for many investors, but not for everyone equally. If your property was owned on or before 12 May 2026, or is a new build, the extra interest remains fully deductible against your income this financial year under the negative gearing and CGT reform that passed Parliament in 2026. If you bought an established property after that date, the extra interest cost adds to a loss that now carries forward rather than offsetting this year's income, so the cash-flow pain lands immediately while the tax benefit is delayed.

The Full 2026 Picture on a $1 Million Loan

Plotting both loan types across every 2026 decision shows how the gap between an owner-occupier and investment loan widens with each hike. The two started the year identically affected in percentage terms, but the interest-only structure of the investment loan means the dollar gap grows every time the RBA moves.

For a borrower holding both an owner-occupied home and an investment property, each with a $1,000,000 loan, the combined extra outlay since January is now around $1,800 a month before tax, or roughly $9,090 plus $12,500 a year. That is a meaningful cash-flow shift worth reviewing with a broker rather than absorbing silently.

Five Things to Do Before the Big Four Confirm Their Rate

Whether your $1,000,000 loan is for your home or an investment, the same window of opportunity applies before the increase is locked in.

• Ask your lender for a retention discount. A 0.20% discount on a $1,000,000 loan is worth about $167 a month on an interest-only investment loan, or around $125 a month on a principal and interest owner-occupier loan.
• Compare your investment loan rate against owner-occupier pricing. Investment loan rates typically sit 0.10% to 0.40% above owner-occupier rates, and refinancing just the investment loan can close that gap.
• Review whether interest-only still suits you. Interest-only terms are usually capped at five years. Modelling the step-up to principal and interest now avoids a second shock later.
• Check your buffer if your investment loss now carries forward. If your established property was purchased after 12 May 2026, build a cash buffer for the gap between the cost landing and the deduction eventually reducing a future tax bill.
• Use offset accounts on both loans, not just your home. An offset account attached to your investment loan reduces interest exactly like one on your home loan, without affecting the loan's deductibility.