Australia · ITAA 1936 section 109N

Division 7A benchmark interest rate

2026–27 income year

8.77%

The ATO lists it as 2027

For the year 1 July 2026 to 30 June 2027. Every published year is below, with the Reserve Bank figure each one comes from.

Checked against the ATO

Checked against the legislation 4 Oct 2026 — how we check.

Every published year

Division 7A benchmark interest rate by income year, newest first
Income year	ATO label	Benchmark rate	Interest on $100,000 for the year	Based on
2026–27	2027	8.77%	$8,770	RBA rate published 5 June 2026
2025–26	2026	8.37%	$8,370	RBA rate published 6 June 2025
2024–25	2025	8.77%	$8,770	RBA rate published 7 June 2024
2023–24	2024	8.27%	$8,270	RBA rate published 7 June 2023
2022–23	2023	4.77%	$4,770	RBA rate published 2 June 2022
2021–22	2022	4.52%	$4,520	RBA rate published 2 June 2021

The ATO’s table starts at the 2021–22 income year, and so does this one. For a loan running before then, use the rate in the loan’s own records; this page does not reconstruct years the ATO no longer publishes.

Which year is “2026”?

The ATO labels each rate by the year in which the income year ends. Its “2026” is the 2025–26 income year, 1 July 2025 to 30 June 2026, at 8.37%. The year that began on 1 July 2026 is 2026–27, listed as 2027, at 8.77%. A search for “the 2026 rate” can mean either, and the two are 0.40 percentage points apart.

What the rate is

Section 109N of the Income Tax Assessment Act 1936 ties it to the Reserve Bank. It is the RBA’s indicator lending rate for bank variable housing loans to owner-occupiers — the series the ATO names as “Housing loans; Banks; Variable; Standard; Owner-occupier” — last published before the income year begins. The last six were all published in the first week of June.

Once the year has started, the figure is fixed. The ATO confirms the benchmark rate for an income year does not change if the RBA later revises the rate it published.

If the company’s income year does not end on 30 June

A private company allowed a substituted accounting period does not use the table above. Its benchmark rate is the RBA figure last published before its own year starts, which can be a very different number. The ATO gives two examples:

A year starting 1 November 2022: 6.77%, the RBA’s September 2022 figure, published in October 2022 — against 4.77% for companies on the 30 June year then running.
A year starting 1 May 2023: 8.02%, the RBA’s March 2023 figure, published in April 2023 — against 4.77% for companies on the 30 June year then running.

So a company with a substituted accounting period needs the RBA series itself, read at the date its own year begins.

One rate for every complying loan, every year

The same benchmark rate applies to a 7-year unsecured loan and to a 25-year loan secured in full by a registered mortgage over real property whose market value, less any liabilities ranking ahead of the mortgage, was at least 110% of the loan when it was made. And it applies to every loan that is running, not only to new ones: each year’s minimum repayment under section 109E(6) is worked out at that year’s rate, on the balance left at the end of the year before.

That is why the repayment changes every year. The Division 7A calculator works the schedule out year by year, at each year’s own rate.

When the 2027–28 rate will be known

It will be the RBA rate last published before 1 July 2027. Until the ATO publishes it, this page shows no figure for that year, and the calculator marks any year after 2026–27 as an assumption rather than a fact.

Frequently asked questions

Is the rate different for a 25-year secured loan?

No. A 7-year unsecured loan and a 25-year loan secured by a registered mortgage use exactly the same benchmark rate in every income year. What the security buys is time, not a lower rate: a year’s interest on a $100,000 balance in 2026–27 is $8,770 either way, but the longer term spreads the principal over 18 more years, so each minimum repayment is smaller.

Can the loan agreement charge more than the benchmark rate?

Yes. A complying agreement needs a rate of at least the benchmark for each year after the loan is made, so a higher one is fine. It does not raise the Division 7A minimum, though: section 109E(6) works the minimum yearly repayment out at the benchmark rate whatever the agreement says. The higher rate changes what the borrower owes the company under the contract, not the Division 7A minimum.

Why did the rate jump between 2022–23 and 2023–24?

It follows the Reserve Bank's published figure, and that figure moved from 4.77% (published 2 June 2022) to 8.27% (published 7 June 2023). On a $100,000 balance that is $3,500 more interest in a single year, and a schedule built on the earlier rate understates every repayment after it.

Which year’s rate applies to a loan made part-way through a year?

None, for the year it is made: no minimum repayment is due in the income year a loan is made, so that year’s rate never enters the formula. The first minimum repayment falls in the following income year, at that year’s rate, and each year after that uses its own.

Sources

Every rate, its RBA publication date and both substituted-period examples are from the ATO’s Division 7A benchmark interest rate page. The definition and the loan terms are sections 109N and 109E of the Income Tax Assessment Act 1936, C1936A00027 (Compilation No. 192). The methodology page explains how this site verifies figures.