CBA and NAB now expect a cash rate hike off the blocks in 2026
16 Dec 2025
CBA and NAB have today both updated their cash rate forecasts, predicting the RBA will hike rates at the first meeting back from the summer break on 2 – 3 February.
Previously, both banks’ economic teams were predicting the cash rate would remain on hold for the foreseeable future.
The shift comes on the back of troubling inflation data, stronger than expected economic growth and a direct warning from the RBA Governor of the possibility of a rate rise.
NAB is forecasting two hikes in February and then May of next year. CBA believes just one hike should be enough to get inflation back to target, however, it acknowledges there is a chance we could see more.
ANZ still expects the cash rate to remain unchanged for the foreseeable future, while Westpac is expecting two cuts in 2026.
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| Current big four bank cash rate forecasts | ||
|---|---|---|
| Bank | Next move | Cash rate at end of 2026 |
| CBA | 1 hike in Feb | 3.85% |
| Westpac | 2 cuts in May, then Aug | 3.10% |
| NAB | 2 hikes in Feb, then May | 4.10% |
| ANZ | None | 3.60% |
What would rate hikes look like for borrowers?
For an owner-occupier paying principal and interest with a $600,000 loan, one 0.25%-point hike would increase their minimum monthly repayments by $90 a month. This assumes they have 25 years remaining on their loan.
However, if there are two cash rate hikes next year, as NAB is forecasting, this would increase their monthly repayments by a total of $180.
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| Impact of RBA rate hikes: $600k mortgage | ||
|---|---|---|
| Change to cash rate | New monthly repayment | Change in monthly repayment |
| 1 x 0.25 hike | $3,778 | +$90 |
| 2 x 0.25 hike | $3,868 | +$180 |
Source: Canstar. Notes: based on an owner-occupier paying principal and interest with 25 years remaining in Jan 2026 at a variable rate of 5.51% (RBA avg). Assumes hikes are in Feb and May and that banks pass the hikes on.
Fixed rates continue to rise on changing forecasts
Big four bank NAB has today hiked fixed home loan rates by up to 0.20 percentage points. As a result, its lowest fixed rate is now 5.39%.
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| NAB fixed rate changes today | |||
|---|---|---|---|
| Term | Old rate from | New rate from | Change %-pts |
| 1-year | 5.29% | 5.39% | +0.10 |
| 2-year | 5.19% | 5.39% | +0.20 |
| 3-year | 5.29% | 5.44% | +0.15 |
| 4-year | 5.69% | 5.79% | +0.10 |
| 5-year | 5.69% | 5.79% | +0.10 |
Source: Canstar. Notes: Rates based on owner-occupier fixed-rate loans. LVR requirements apply.
The move comes hot on the heels of Westpac’s hikes to fixed rates last Friday. As a result, ANZ now has the lowest fixed rate out of the big four banks, at 5.19% for 2 years.
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| Big four bank lowest fixed rates | ||||
|---|---|---|---|---|
| CBA | Westpac | NAB | ANZ | |
| 1-year | 5.49% | 5.49% | 5.39% | 5.29% |
| 2-year | 5.44% | 5.59% | 5.39% | 5.19% |
| 3-year | 5.34% | 5.69% | 5.44% | 5.34% |
| 4-year | 5.79% | 5.89% | 5.79% | 5.74% |
| 5-year | 5.94% | 5.89% | 5.79% | 5.74% |
Source: Canstar. Rates based on owner occupier fixed rate loans. LVR requirements apply.
The big four banks aren’t the only ones hiking. Rate tracking shows 15 banks have increased at least one fixed rate since the RBA met last Tuesday (9 Dec).
Canstar’s data insights director, Sally Tindall says, “The RBA Governor’s blunt warning last week put the nation formally on notice. Cash rate cuts are now behind us, and what’s in front could well be a rate hike.”
“Today, two of Australia’s biggest banks have joined the chorus, both suggesting the first hike could come as soon as February.
“By the time the RBA meets again in February, it will be armed with more data, including two additional monthly inflation prints and another employment report.
“However, if CPI doesn’t start tracking confidently in the right direction, the Board could well be forced to act, particularly if the labour market continues to prove resilient under current interest rate settings.
“While these cash rate forecasts might not unfold exactly as planned, households with a mortgage should prepare for the possibility of hikes, and not just one.
“For someone with a $600,000 loan and 25 years remaining, two hikes next year could see their minimum monthly repayments rise by $180. Not exactly the 2026 borrowers were hoping for.
“NAB’s change to its cash rate forecast comes on the back of hikes to its fixed rates this morning. It’s the latest big bank to raise these rates in the last five days, with Westpac hiking last Friday.
“As a result, ANZ can now claim the title of the big four bank with the lowest fixed rate, at least for now. However, when you look across the whole market, its rates are still head and shoulders above the lowest rate lenders.
“If you’re considering fixing, compare your options beyond the four walls of your big bank. On a $600,000 mortgage, with 25 years remaining, the difference between opting for ANZ’s lowest 2-year rate versus the lowest in the market translates into a whopping $4,773 in interest over the next 24 months. That’s not spare change – that’s a whole monthly repayment for many borrowers – just by shopping around.”
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| Lowest fixed rates on Canstar | ||
|---|---|---|
| Term | Lender | Lowest rate from |
| 1-year | Pacific Mortgage Group | 4.84% |
| 2-year | Community First, Illawarra Credit Union | 4.79% |
| 3-year | Horizon Bank | 4.84% |
| 4-year | Teachers Mutual Group, Freedom Lend | 5.24% |
| 5-year | Teachers Mutual Group, Freedom Lend | 5.24% |
Source: Canstar. Rates based on owner occupier fixed rate loans. Excludes first home buyer, green only and other special condition loans. LVR requirements apply.
This article was reviewed by our Deputy Finance Editor Alasdair Duncan before it was updated, as part of our fact-checking process.
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