Frustrated mortgage holders will officially pay more interest on their home loans starting on Friday, as the major banks pass on the rates pain.

All four major banks will lift the cash rate by 25 basis points for variable mortgage holders following the Reserve Bank’s latest hike announced last week.

The Commonwealth Bank’s new rate now stands at 6.34 per cent, NAB’s between 6.29-7.04 per cent and ANZ 6.50 per cent.

The move marks the end of big bank rates starting with a 5, with Westpac’s lowest rate now standing at 6.24 per cent.

According to Compare the Market, the average mortgage payers with a loan around $731,000 will spend roughly $5568 more over the course of a year now that rates are a full 1 per cent, higher than they were at the start of 2026.

Compare the Market economics director David Koch called the latest interest rate hike “a gut punch for households”.

“Where are people meant to find an extra $5500 a year? And that’s after tax … On top of that, households are getting hit at the petrol pump and again at the supermarket,” he said.

“Rates are higher, loans are bigger, and we have a whole generation of mortgage payers who have never seen rates this high.

“We can’t keep asking the same group of people to keep tightening their belts when there are forces pulling in the opposite direction.”

Why big four banks are lifting rates

The major four banks have lifted what they are charging mortgage holders following the September 29 interest rate hike announcement.

In a widely expected move, the RBA’s monetary policy board unanimously agreed on Tuesday to lift the rate by a further 25 basis points to 4.60 per cent.

This was the fourth rate hike of the cycle, taking the cash rate from 3.60 to 4.60 per cent.

RBA governor Michele Bullock said she understood the hike decision was “tough” for mortgage holders, but if inflation wasn’t lowered, interest rates would need to go even higher.

Inflation is sitting at 3.5 per cent, above the target range of 2-3 per cent.

“Today’s increase in interest rates is needed to slow the economy and return inflation to target,” Ms Bullock told reporters.

“Now, I know this decision is difficult for households with a mortgage and businesses with loans, but high inflation hurts all Australians, especially the most vulnerable.”

Canstar data insights director, Sally Tindall said the move of all banks would be “brutal” for home loan customers.

“This is going to be brutal for some borrowers who are lugging around super-sized debts attached to rates that could soon easily start with a 7,” she said.

“One thing to bear in mind as a borrower, is that it’s not all going to happen at once.

“Yes, your big bank will start charging you the higher rate from next Friday, but it will give you a lot more time to work out how you’re going to afford the increase in repayments.”