Most Australians Don’t Have a Mortgage: Rate Rise Helps Savers
Only about one in three Australian households has a mortgage, so the Reserve Bank's latest 0.25-point cash-rate rise lifts returns for many savers. Westpac data puts the gain at $132 a year for an average saver aged 45 to 54 with more than $50,000.
Only about one in three Australian households has a mortgage, so the Reserve Bank of Australia's latest 0.25 percentage point cash-rate rise leaves many savers better off, according to an analysis published November 10, 2026.
Most coverage of rate rises focuses on home owners facing higher repayments. Higher rates also put more money into savings accounts.
What the figures show
Westpac data shows an average Australian aged 45 to 54 with more than $50,000 in the bank earns an extra $132 a year from the latest rise.
The cash rate has climbed 1.25 percentage points this year. If banks pass that on in full, the same saver would collect an additional $660 over the next year.
Rates are now at their highest since 2008, during the global financial crisis.
Why the RBA keeps raising rates
The central bank uses interest rates to pursue two goals: keeping as many people as possible in work and holding inflation between 2 and 3 per cent.
Jobs are holding up, with unemployment at 4.7 per cent. Inflation is the problem. The latest estimate, from September, put it at 4.3 per cent.
High inflation hurts poorer households most, the analysis said, because essentials absorb more of their income and leave less room to cut back.
Winners and losers
Anyone with money in a savings account can potentially benefit. The direct losers are households with large variable-rate debts, most commonly mortgages.
Businesses may face softer demand, which can push unemployment higher. Super balances may also move, depending on the assets in a portfolio.
The two groups overlap. Many people hold both a mortgage and savings, and whether they come out ahead depends on the size of each.
How savers can respond
The analysis suggests moving spare cash into the highest-rate savings account available, provided the saver has no expensive debts to pay down. A little can stay in a transaction account for upcoming bills.
It also warns about short-term introductory rates and onerous conditions attached to "bonus" interest. Comparison websites may not list every account, and AI chatbots can make errors.
Savers should check whether their bank passed on the latest 0.25 percentage point rise. If it did not, they can ask for a better rate or shop around, and switching may achieve more than complaining.
Borrowers can use a linked offset account to cut the interest they pay. Every extra dollar in it shelters money from the bite of the rate rise.
