August flagged as the most likely timing as RBA leaves door open to further tightening
More than half of economists surveyed by price comparison webiste Finder expect the Reserve Bank of Australia (RBA) to lift the cash rate at least once more before the end of the year, even as three of the four major banks forecast rates have already peaked.
The Finder RBA Cash Rate Survey, which polled 38 economists and experts, found that 55% anticipate at least one further increase this year. Of those, 62% believe August is the most likely timing.
The RBA's June statement kept that prospect alive, with the board saying it would do what was necessary to achieve price stability, "including increasing the cash rate target further if required."
Commonwealth Bank, NAB and ANZ all expect the cash rate to remain on hold for the remainder of 2026, with easing beginning in 2027. NAB is forecasting the rate to reach 3.6% by the end of next year, while ANZ is tipping 25-basis-point cuts in September and December 2027 to bring the cash rate to 3.85%.
Westpac is the clear outlier among the major banks, forecasting two further 25-basis-point increases this year — in August and September — before any easing begins. Should both moves be delivered, the cash rate would reach 4.85%, its highest level since 2011.
For a borrower with a $600,000 mortgage and 25 years remaining, each 25-basis-point increase would add approximately $92 per month to repayments. Across four increases for the year — in February, March, May and either August or September — the cumulative monthly rise would reach $364.
| Impact of a further 0.25 hike on monthly repayments | ||
|---|---|---|
| Loan size at start of hikes | Hike in August | Cumulative increase (Feb + Mar + May + Aug) |
| $600,000 | +$92 | +$364 |
| $800,000 | +$122 | +$485 |
| $1 million | +$153 | +$606 |
| Source: Canstar.com.au | ||
Sally Tindall (pictured right), data insights director at Canstar, said the June pause should not be mistaken for the end of the tightening cycle. "The RBA just hit the pause button for the first time since 2025," she said. "It's a welcome break, at least for now. However, the Board certainly hasn't declared victory over inflation.
"Inflation is sitting at 4.2% and the RBA needs it at 2.5%. While the central bank is currently treading water, there's still a long road ahead, which could still include at least one more hike. By leaving the door open to another rate hike, it's reminding borrowers that today's pause shouldn't be mistaken for the end of the tightening cycle."
Richard Whitten (pictured right), home loans expert at Finder, struck a similar note of caution. "Borrowers who have watched their monthly repayments climb this year will view this hold as a moment of calm," he said. "But we aren't out of the woods.
"The cash rate remains at its highest level in years, and our data shows 40% of homeowners were already struggling to pay their mortgage in May – up from 35% in January.
"With more than half of our panel predicting another hike is just around the corner, now is the time to act. If you haven't haggled with your bank or looked into refinancing since the start of the year, you could almost certainly be getting a better deal."
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