CBA has this morning brought forward its cash rate forecast, joining major banks Westpac and NAB in predicting the RBA will deliver a 0.25 percentage point rate hike at its Board meeting next week.
NAB has predicted a September hike since late August, while Westpac updated its outlook late Friday afternoon.
ANZ is now the only major bank expecting the RBA to hold next week, although it expects a hike in November.
All four big banks say the risk lies with a further hike this year, which would make it five cash rate hikes in 2026, although this is not officially in their forecasts.
Cuts are still potentially on the horizon, however, CBA’s economic team has today pushed back the timing of the first reduction from May to August 2027.
Big banks cash rate forecasts | ||
|---|---|---|
Next move | When | |
CBA | +0.25 | Sep 2026 |
Westpac | +0.25 | Sep 2026 |
NAB | +0.25 | Sep 2026 |
ANZ | +0.25 | Nov 2026 |
Source: Prepared by Canstar.
Impact of a cash rate hike
A 0.25 hike in September would add $91 to the monthly repayments for a borrower with a $600,000 loan at the start of the hikes in 2026.
If there is another 0.25 hike in November, repayments would increase by $92, and across what would be five rate hikes, that borrower would be paying an extra $456 per month on their mortgage.
Impact of 0.25 cash rate hikes on monthly repayments | ||||
|---|---|---|---|---|
Loan size at start of hikes | Hike in Sep | Cumulative increase across 4 hikes | Hike in Nov | Cumulative increase across 5 hikes |
$600,000 | +$91 | $364 | +$92 | $456 |
$750,000 | +$114 | $454 | +$115 | $570 |
$1 million | +$152 | $606 | +$153 | $759 |
Source: Canstar. Based on an owner-occupier paying principal & interest with 25 years remaining in Feb 2026 at the RBA avg variable rate. Assumes rate hike in Sep and Nov and banks pass it on the month after. Changes are to minimum repayments.
The case for a September hike
CBA and Westpac have pointed to recent comments from key RBA Board members and staff as the key reason for their revised forecasts. Rising oil prices and developments in the war in the Middle East are also adding to inflation risks.
Governor Bullock’s opening statement to the House of Representatives Standing Committee on Economics on Friday noted that inflation risks “appear to be materialising”.
This comes on the back of July’s higher-than-expected inflation figures, which alone were enough for NAB to pivot its forecast for the RBA’s next move from being a cut in 2027, to a hike in September 2026.
Canstar’s data insights director, Sally Tindall, says, “Three of Australia’s big four banks now believe the RBA will announce a hike to the cash rate to 4.60 per cent at the end of its meeting next Tuesday.”
“While the market is moving firmly towards the possibility of a hike, we could well see a split vote emerge from the Reserve Bank Board. If the RBA does hike, it won’t be doing it lightly.
“So many households are hurting, yet so many remain resilient. Escalating global conflicts and rising oil prices are playing a part, but so is stronger-than-expected household spending.
“The August Labour Force data out this Thursday is one of the last pieces of the puzzle before the Board meets, however, it's difficult to see the results from this dataset convincing the RBA to hold, particularly considering its been relatively robust under the weight of the three hikes we’ve had to date this year.
“If the RBA delivers a 0.25 percentage point increase next week, a borrower with a $600,000 loan will be paying an extra $91 a month. That will push their cumulative repayment costs up by $364 a month since this hiking cycle began.
“Borrowers can’t control what the RBA does next week, but they can take control of their own interest rate today by negotiating with their current lender, or refinancing to a more competitive offer.
“There are 50 different lenders on the Canstar database offering at least one variable rate under 6 per cent, with rates as low as 5.69 per cent for some customers.
“The antidote to the next rate hike could be sitting right in front of you.”
