Interest rate forecast and predictions for 2026
The big banks are currently split in their cash rate forecast for 2026, with two of the big four predicting the cash rate will go up.
19 Dec 2025
The big banks are currently split in their cash rate forecast for 2026, with two of the big four predicting the cash rate will go up.
What is happening with the cash rate?
After several years of steep hikes, and a year without movement in 2024, the central bank finally began lowering rates at the beginning of 2025, and cut the cash rate a total of three times throughout the year.
With inflation on the rise, though, the RBA held the cash rate steady at 3.60% at its December meeting, and and the cycle of cuts appears to be well and truly over, with two of the big banks predicting rises again in 2026.
Will Australians see rate cuts in 2026?
Canstar’s data insights director, Sally Tindall says that, as it stands, further rate cuts into the new year appear unlikely, given that inflation is presently not on track to get back within the central bank’s target band of 2-3%.
“At this stage, not even the RBA knows with any great certainty whether its next move will be up or down,” Tindall says.
“Borrowers with a mortgage should not plan for any further rate relief in 2026, and instead, start preparing for a potential hike, just in case one materialises later next year.”
What are the big four banks’ cash rate predictions?
Here’s what the major banks currently have to say about the RBA’s predicted movements into 2026:
- ANZ currently predicts that the cash rate will remain steady.
- CBA currently predicts a rise of 25 basis points in February.
- NAB currently predicts a rise of 25 basis points in February and another in May.
- Westpac currently predicts that the cash rate will remain steady.
Where the RBA board formerly met on the first Tuesday of each month, excluding January, it now meets eight times a year, for two days at a time. This means that the RBA’s next cash rate announcement is due on Tuesday February 3 at 2.30pm.
Will interest rates rise again in 2026?
One of the RBA’s key mandates is to keep inflation in line in the economy, and with headline inflation now sitting at 3.8%, above the central bank’s preferred range, a cash rate rise is not out of the question.
Citi was the first major bank in Australia to forecast a hike in 2026, and economists there are currently tipping two raises next year, one in February and one in March.
CommBank and NAB had both predicted that the central bank would hold rates steady in the first half of 2026, but both have recently revised this forecast. Both predict a hike in February, and NAB is also calling one for May.
How can I compare home loans?
If you’re looking for a low fixed or variable rate for a new home loan or a refinance, you can compare home loans with Canstar to see if you can find a lender offering a deal that meets your needs and circumstances.
If you’re considering refinancing from a variable rate to a fixed one, it may also be worth considering the pros and cons of fixing your home loan, and considering the current interest rates on home loans to see how fixed and variable rate loans stack up. You might also want to consider some of the home loan refinancing deals that might be available.
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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