ANZ the last big bank to tip May RBA rate rise, is now the time to fix?
26 Feb 2026
ANZ has today changed its cash rate forecast on the back of yesterday’s inflation figures, with the bank now predicting the RBA will hike the cash rate to 4.10% in May. Previously, ANZ’s economic team was predicting the cash rate to remain on hold at 3.85%. As a result, all four big banks, CBA, Westpac, NAB and now ANZ, expect one further cash rate hike in May, followed by a prolonged hold.
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| Current big four bank cash rate forecasts | ||
|---|---|---|
| Bank | Forecast | Cash rate – end 2026 |
| CBA | 1 x 0.25 in May | 4.10% |
| Westpac | 1 x 0.25 in May | 4.10% |
| NAB | 1 x 0.25 in May | 4.10% |
| ANZ | 1 x 0.25 in May | 4.10% |
Impact of a further cash rate hike
For someone with a $600,000 mortgage and 25 years remaining, a second cash rate hike in May 2026 would increase their monthly repayments by $90. Across what would then be two hikes for the year, the total increase would be $180.
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| Impact of a further RBA hike on minimum monthly repayments | ||
|---|---|---|
| Debt owning | Hike in May | Across 2 hikes (Feb + May) |
| $600,000 | +$90 | +$180 |
| $800,000 | +$120 | +$240 |
| $1 million | +$151 | +$300 |
Source: Canstar. Notes: based on an owner-occupier paying principal and interest with 25 years remaining in Feb 2026 at the RBA average existing customer variable rate. Calculations assume the RBA hikes the cash rate in May 2026 and banks pass on both the Feb and May hikes the month after.
Is now the window to fix or have we missed the boat?
While there are no more fixed rates under 5%, at least for now, Canstar compared several scenarios to see which option would come out ahead over the next two years—fixed or variable. In this test, we looked at the average of the lowest five variable rates on Canstar at 5.33% versus the average of the five lowest 2-year fixed rates at 5.31% (see notes in table).
For an average owner-occupier with a $600,000 loan and 25 years remaining, opting for one of the lowest 2-year fixed rates, instead of one of the lowest variable rates, would potentially save them $239 in interest, even if there are no further cash rate changes over the next two years. If there is a hike, followed by a prolonged period of rates on hold, then the fixer could potentially save $2,842 over the next two years. If there is a hike in May, as the big banks are expecting, but then a cut early next year, fixed would still come out ahead by $1,374.
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| Fixed vs variable – which comes out on top? $600k loan | |
|---|---|
| Cash rate scenarios: next 2 years | Which comes out on top: after 2 years |
| No change | Fixed by $239 |
| 1 hike in May 2026 | Fixed by $2,842 |
| 1 hike in May 26, 1 cut in February 27 | Fixed by $1,374 |
Source: Canstar. Notes: based on an owner-occupier paying principal and interest with a $600k loan in March 2026 and 25 years remaining. Assumes hike is in May and a cut is in Feb 2027. Calculations are for illustrative purposes only. They reflect the interest charges and do not include fees or any extra repayments. Lowest rates are post-RBA rates and exclude first home buyer only, eco and introductory rate loans.
Canstar’s data insights director, Sally Tindall, says, “ANZ was the last big bank holding firm on its view the RBA would only need a single hike to finish off the inflation job, but yesterday’s CPI figures have pushed the team to change their tune. With all four major banks now pencilling in a May hike, borrowers should brace for the likelihood that rates aren’t quite done rising yet.
“For someone with a $600,000 mortgage, another hike in May would add about $90 a month to repayments. Across two hikes this year, that’s roughly $180 extra every month. That’s the equivalent of a decent grocery shop disappearing from the household budget. With the cash rate now in the vicinity of neutral, it’s unlikely we’ll see a spate of hikes or cuts in this cycle, which makes the decision of whether to fix or not, a borderline one.
“Canstar analysis shows that even if there are no further cash rate hikes, one of the lowest two-year fixed rates currently on offer could end up cheaper than the lowest variable rate options over the next two years. If the RBA does hike again in May, the savings from fixing become more meaningful – potentially close to $3,000 in interest on a $600,000 loan, provided rates remain on hold thereafter for the rest of the fixed rate term. With the equation largely on a knife’s edge and resting on a crystal ball at that, borrowers might be better off picking what suits their finances, lifestyle and in some cases, their personality.
“Fixing isn’t everyone’s cup of tea. Borrowers need to weigh up the potential savings against flexibility. If you’re planning to sell, refinance or pay off a chunk of your loan in the fixed rate period, it might not meet your needs.”
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
