The benchmark interest rate for the 2026-27 income year is 8.77 per cent. Section 109N(2) of the Income Tax Assessment Act 1936 does not name a figure: it points at the Reserve Bank's indicator lending rate for bank variable housing loans, the last one published before the income year starts. That makes the rate something you can derive and check, not just look up.
| Income year | Benchmark rate |
|---|---|
| 2026-27 | 8.77 per cent |
| 2025-26 | 8.37 per cent |
| 2024-25 | 8.77 per cent |
| 2023-24 | 8.27 per cent |
| 2022-23 | 4.77 per cent |
| 2021-22 | 4.52 per cent |
| 2020-21 | 4.52 per cent |
| 2019-20 | 5.37 per cent |
The table starts at 2019-20. The ATO publishes the same figure for each year on its own site, and that is the one to confirm against for the year you are actually relying on.
Take the Reserve Bank's F5 Indicator Lending Rates table and read the bank variable housing loans series for owner-occupiers. The rate for an income year is the last figure published before that year began. The Reserve Bank publishes F5 monthly, roughly ten days after the month it covers, so the last figure published before 1 July is the one for May. For the year that started 1 July 2026 that is May 2026, which was 8.77 per cent.
Reading the June figure instead is the usual mistake, and it changes the answer in a normal year. June 2025 sat at 8.27 per cent while May 2025 sat at 8.37 per cent, and 8.37 is the benchmark rate for 2025-26. Section 109N(2) also leaves room for regulations to set the rate a different way, and none currently do.
The data is at the Reserve Bank's statistical tables, table F5.
A loan from a private company to a shareholder or an associate is treated as a dividend unless it is put on terms that satisfy section 109N, all of which have to be in place before the lodgment day for the year the loan was made. Section 109N(1) asks for three things: a written agreement, a rate of interest for years after the year the loan was made that equals or exceeds that year's benchmark rate, and a term inside the maximum. The minimum yearly repayment is then calculated using the current year's benchmark rate under section 109E. The maximum term is seven years, or twenty five years where the loan is fully secured by a registered mortgage over real property and the property's value, net of prior liabilities, is at least 110 per cent of the loan.
A rising benchmark rate therefore raises the minimum repayment on every existing complying loan, not just new ones.
8.77 per cent. It is the Reserve Bank's indicator lending rate for bank variable housing loans last published before 1 July 2026, which was the May 2026 figure.
8.37 per cent, the May 2025 figure. The June 2025 figure of 8.27 per cent was not published until after the income year had started, so it does not apply.
Section 109N(2) of the Income Tax Assessment Act 1936 points at the Reserve Bank's indicator lending rate for bank variable housing loans, the last one published before the start of the income year, unless regulations provide another method. None currently do.
Yes. The minimum yearly repayment for a year is worked out using that year's benchmark rate, so an existing complying loan needs a larger repayment in a year when the rate rises.
Seven years, or twenty five years where the loan is fully secured by a registered mortgage over real property whose value, less prior liabilities, is at least 110 per cent of the loan when it is first made.
General reference only, not tax, legal or financial advice, and using it creates no professional relationship. These figures are derived from the Reserve Bank series the Act names, on the date above. The ATO publishes the benchmark rate for each year, and a loan agreement is worth checking against a practitioner rather than a table.