Motorcycle finance rates for new loans and on existing variable rate loans will likely rise following the September Reserve Bank rate increase decision. With many new models about to hit the Australian market in coming months from Suzuki, KTM and Kawasaki, riders may be questioning their buying plans. Considering if they should postpone until rates come down, wondering if they will be able to secure affordable motorcycle finance rates on their loan.
Persistently high rates of inflation from issues in the Australian economy and made worse by the Iran war have created a complex situation for the Reserve Bank Monetary Policy Board to navigate. The Board’s unanimous decision on 29 September was to lift the cash rate by 25 basis points to 4.5%. This is the fourth increase this year which puts the cash rate at its highest in 15 years.
What is behind the decision? What is the outlook moving forward? It is complicated, but we have unpacked and tried to simplify some of the key points to clarify the situation for buyers planning to purchase a new machine with finance.
September Reserve Bank Rate Increase
On Tuesday 29 September the Monetary Policy Board of the Reserve Bank of Australia increased the cash rate to 4.5%. The decision was unanimous after the Board discussed both a rate hold and the 0.25% increase.
Key reasons for the decision were inflation remaining high and some of the risks that were identified in August materialising, specifically, the Iran war and Middle East conflict continuing for longer and causing ongoing issues in the global fuel market.
While there are some that are attributing high inflation to the Middle East situation and others to high levels of Government spending, the RBA points out that inflation was already too high in Australia before that war started and private spending is also an issue. Inflation started rising again in late 2025. But as Michele Bullock, Governor of the RBA, stated in the post-decision media conference, the Middle East war has made the domestic situation worse and ‘has made us all poorer’.
The increases in fuel prices globally caused by the Iran war are being felt in Australia at the bowser, in increased transport costs which then flow through to the price of many goods. The agricultural sector is being impacted with fertiliser costs and availability.
In addition to inflation and the Middle East war, the RBA Board has now included AI as a significant impact on inflation and the domestic economy. The boom in the sector is causing increases in prices for technology and creating issues in the construction sector with the rush to build data centres. The AI sector is also attracting significant investment, possibly drawing away from investment in other industries.
The Board notes that the labour market remains tight. Responding to questions on the rate of unemployment, Ms Bullock noted unemployment remained at a low rate historically, but that productivity was not moving. The RBA does not have tools to address productivity and noted that supply levels need to improve to meet the level of demand to drive down inflation.
Ms Bullock mentioned some regulatory actions which might be taken by other authorities to boost productivity but that it was up to businesses to take up opportunities. Businesses are experiencing their own cost pressures. Inflation affects all sectors, not just consumers. Many businesses had no option but to pass on their own cost increases through increases in prices of their goods and services, further driving inflation.
Moving forward, the RBA Board remains focussed on ensuring a high inflation rate is not embedded and that it is driven back to the 2-3% target. Monetary Policy - cash rate changes - is the tool available to the central bank to achieve this objective and, according to Ms Bullock, it is a proven tool.
Ms Bullock said if further rate increases are seen as necessary to address inflation, the Board would be doing so. But as is the norm, the Board does not forecast or pre-empt future decisions. They consider the data as available at the time. The Governor noted that when inflation figures are released, they tell what has happened in the past. The decisions made by the Board are to affect what will happen in the future.
The next meeting of the RBA Monetary Policy Board to make a decision on interest rates is Tuesday 3 November.
Motorcycle Finance Rates Impacts
The RBA rate rise will not affect existing motorbike loans with a fixed interest rate. Most lenders offer a fixed rate on Secured Motorbike Loans. If a loan was taken out with a variable rate, borrowers can expect that their lender will likely increase that rate following the RBA September decision.
For buyers wanting a loan for a new machine purchase, we are likely to see lenders in the consumer finance sector adjust their rates with this latest rate rise. But it is a decision for individual lenders to make and rate variations will still exist across the market.
Our brokers remain focussed on sourcing the most competitive motorcycle finance rates for our customers from across our large lender base. To plan finance for your upcoming purchase, refer to our latest rates and use our Motorbike Finance Calculator to work up estimates and compare machines.
Contact Jade Bike Loans for highly competitive motorcycle finance rates following the latest Reserve Bank rate increase. Call 1300 000 003.
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA IS PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
