When will interest rates go down in 2026?

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At its June 2026 board meeting, the Reserve Bank of Australia (RBA) board held the cash rate steady at 4.35%, but all eyes are now on the central bank to see if and how soon it will raise rates again this year.

The RBA cut rates three times in 2025, offering a measure of relief to variable-rate home loan borrowers. With inflation creeping back up again and uncertainty as to the impact of the conflict in the Middle East, though, another hike could be looming.

The board of the RBA has not ruled out another hike, saying that it “remains focused on its mandate to deliver price stability and full employment,” and “will do what it considers necessary to achieve that outcome, including increasing the cash rate target further if required.”

The major banks, on the other hand, are all predicting that the rate hikes are behind us, and that we’ll start to see easing in the form of rate cuts, starting in the middle of 2027. What could the rest of the year hold for interest rates in Australia?

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When do the big four banks think rates will go down?

The RBA’s board will announce its next cash rate call for 2026 on Tuesday August 11, but in the meantime, here’s what the big four banks are forecasting.

ANZ: Cuts to the cash rate beginning in 2027

Economists at ANZ currently predict that we’ve seen the last of the rate hikes for now, and that the RBA will deliver two 25 basis point cuts in 2027, in September and December. This would bring the cash rate to 3.85% by the end of next year.

Commonwealth Bank: Cuts to the cash rate beginning in 2027

Economists at Commbank currently predict that we’ve seen the last of the rate hikes for now, and that the RBA will deliver two 25 basis point cuts in 2027, in May and September. This would bring the cash rate to 3.85% by the third quarter of next year.

NAB: Cuts to the cash rate beginning in 2027

Economists at NAB currently predict that we’ve seen the last of the rate hikes for now, and that the RBA will deliver three 25 basis point cuts in 2027, in June, September and December. This would bring the cash rate to 3.60% by the end of next year.

Westpac: Cuts to the cash rate beginning late 2027

Westpac was the one holdout of the big four banks, and until recently, predicted we’d see more hikes in 2026. Now, however, economists at Westpac predict the RBA will deliver two 25 basis point cuts in 2027, in August and December. This would bring the cash rate to 3.85% by the end of next year.

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 August 11.

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This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

Alasdair Duncan

Deputy Finance Editor

Alasdair Duncan is Canstar's Deputy Finance Editor, specialising in home loans, property and lifestyle topics. He has written more than 500 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo Finance, The New Daily, The Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au.

In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland.

When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn.