Interest rate forecast 2026: when will rates go up in Australia?

The Reserve Bank of Australia (RBA) cut the cash rate three times last year, offering a measure of relief to variable rate home loan borrowers, but the cuts are officially over, following a rate rise at the start of 2026.

At its February meeting, the board of the RBA raised the cash rate by 25 basis points to 3.85%, and the question now becomes whether the cash rate will hold steady or hike again, as the central bank focuses on getting inflation in line.

The bank’s board makes its next announcement on Tuesday March 17, and at this point, the big banks are split on whether we’ll see any further hikes in the months to come.

What do the major banks say about future cash rate hikes?

ANZ predicts the RBA will hold rates steady throughout 2026.

CommBank predicts the RBA will hold rates steady throughout 2026.

NAB predicts a 25 basis point rise in May.

Westpac predicts the RBA will hold rates steady throughout 2026.

Will rates rise in 2026?

Following the release of January CPI data, which saw headline inflation rise to an annual rate of 3.8%, Canstar’s data insights director Sally Tindall says that a February cash rate hike was likely a done deal.

“We’re now four long years into the battle with inflation and today’s results confirm we’re once again headed in the wrong direction, she said, adding that “the RBA no longer has the luxury of continuing its ‘wait-and-see’ strategy if it’s serious about getting the inflation job done.”

As for whether the RBA will hike again, CommBank’s head of Australian economics Belinda Allen speculated that current global geopolitical uncertainty could be enough to give the central bank pause.

This was not enough to dissuade the RBA from a rate hike in, February, and it will remain to be seen what the central bank decides to do in months to come.

How to ease the pain on your mortgage

There are ways you may be able to pay off your home loan quicker than planned. For example, paying more than the minimum required, or switching from calendar monthly to fortnightly payments can help you reduce the outstanding amount on your loan faster.

You can use our extra repayments calculator to see how that could affect your home loan.

If you’re worried about the impact of any rate rise on your home loan repayments, you might want to consider reviewing your loan. A good place to start is by researching what other rates and loans are on the market, via a comparison website such as Canstar.

Armed with this information, you may choose to discuss with your lender what options may be available, such as fixing all or part of your loan. If you’re in a position to do so, you could also consider asking them for a lower rate, citing examples of other rates on offer.

You may also want to consider switching lenders to take advantage of a more competitive deal, including any refinance offers. But refinancing could involve the payment of fees, so it’s a good idea to read all important documentation, such as the Target Market Determination (TMD) and Key Facts Sheet, before making a decision.

Of course, any rate rise, while bad news for mortgage and other loan customers, would be good news for savers.

Anyone with savings in an interest bearing account will likely be looking for greater return on their money but borrowers will be keen to keep their repayments low, and that’s the challenge the RBA faces every time it meets to consider changing the cash rate.