When will interest rates go down in 2026?
The RBA cut the cash rate three times in 2025, but now the question is which way rates will move in the new year,
19 Dec 2025
The RBA cut the cash rate three times in 2025, but now the question is which way rates will move in the new year,
At its February 2025 board meeting, the Reserve Bank of Australia (RBA) board cut the cash rate by 25 basis points to 4.10%. This was the first change in 15 months, and was followed by another 25 basis point cut in May and a further one in August, bringing the cash rate to its current level of 3.60%.
While these cuts gave a measure of much-needed relief to variable rate home loan borrowers, the rate cut party appears to be over. With inflation edging up once again, the RBA held at its last meeting of 2025, and the nation’s big four banks are now split on whether rates will stay where they are, or climb again in the new year.
When do the big four banks think rates will go down?
Economists at Australia’s major banks had originally predicted that the cycle of cuts would continue into the new year, but recent inflation figures put this in doubt. By mid-December, Westpac was the only remaining big four bank predicting cuts, but with inflation remaining stubbornly above where the RBA wants it to be, they revised this position.
The RBA’s board will announce its first cash rate call for 2026 on Tuesday February 3, but in the meantime, here’s what the big four banks are forecasting.
ANZ: No further movement in the current cycle
ANZ predicts no further cash rate movement at this stage.
Commonwealth Bank: One cash rate hike in the new year
Commonwealth Bank predicts that the cash rate will go up by 25 basis points in February.
NAB: Two cash rate hikes in the new year
NAB predicts that the cash rate will go up by 25 basis points in February and again in May.
Westpac: No further movement in the current cycle
Westpac predicts no further cash rate movement at this stage.
When does the RBA board meet next?
The board of the RBA has changed its meeting schedule in 2024. Where it used to meet on the first Tuesday of each month, excluding January, it now meets eight times a year, for two days at a time. The rationale behind this altered schedule is to give the board more time to consider its decisions. The meeting dates for the RBA board in 2026 are as follows:
- 2–3 February
- 16-17 March
- 4–5 May
- 15–16 June
- 10–11 August
- 28–29 September
- 2–3 November
- 7–8 December
The RBA’s next cash rate announcement is due on Tuesday February 3.
This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.
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