CBA has this morning shifted its cash rate forecast on the back of yesterday’s troubling inflation results, with the bank now predicting the RBA will hike the cash rate in November to 4.60%.
If this happens, it would be the highest cash rate setting the country has seen since October 2011.
ANZ changed its forecast yesterday after the release of the inflation figures, while NAB has said its forecast is under review.
The shift comes following the release of the previous Board meeting minutes which confirmed the central bank’s willingness to hike the cash rate again should upside risks materialise.
Both CBA and ANZ believe the inflation data is likely to achieve this.
Prior to this, all big four banks were predicting the RBA’s next move would be a rate cut, albeit not until 2027.
Big banks cash rate forecasts | ||
|---|---|---|
Next move | When | |
CBA | HIKE | +0.25 in Nov 2026 |
Westpac | CUT | -0.25 in Aug 2027 |
NAB | TBC | Under review |
ANZ | HIKE | +0.25 in Nov 2026 |
Prepared by Canstar.com.au.
Impact of a rate hike in November
A 0.25 percentage point rate hike in November would add approximately $91 to the monthly repayment on a $600,000 loan with 25 years remaining, according to Canstar analysis.
Across what would then be four rate hikes this year, the total increase to monthly repayments would be $363.
Impact of further 0.25 hike on monthly repayments | ||
|---|---|---|
Loan size at start of hikes | Hike in Nov | Cumulative increase across 4 hikes |
$600,000 | +$91 | +$363 |
$800,000 | +$121 | +$484 |
$1 million | +$152 | +$605 |
Source: Canstar. Notes: Based on an owner-occupier paying principal and interest with 25 years remaining in Feb 2026 at the RBA avg variable rate. Assumes next rate hike is in Nov and banks pass it on the month after. Changes are to minimum repayments.
Canstar’s Data Insights Director, Sally Tindall, says, “The economic narrative has taken a U-turn in the space of just a couple of days.”
“Yesterday’s inflation figures were the reality check CBA and ANZ couldn’t look past.
“Yes, annual headline inflation might have dropped in the latest data, however, this was because of a spike in electricity and travel prices from July last year, not from good progress we’ve made right now.
“Core inflation provides a clearer picture of the troubles in the figures. In the last eight rounds of monthly data the annual figure has not gone down. Not once.
“The Board signaled in its latest minutes that it wouldn't hesitate to pull the trigger if upside risks materialised, and, based on yesterday’s inflation data, two of Australia’s biggest banks now believe those risks are coming home to roost.
“Another 0.25 percentage point increase in November isn't just an extra $91 a month for someone with a $600,000 loan and 25 years remaining. Across what will then be four hikes for the year, this borrower could end up forking out $363 extra a month compared to the start of the year.
“While both CBA and ANZ believe a hike will materialise in November, borrowers should know it will be front and centre of the discussions at the next Board meeting in just over a month’s time and the RBA might not choose to wait.
“If you haven't reviewed your mortgage rate recently, the next four weeks is the time to do it. The gap between the big four's variable rates and what’s on the table from smaller lenders continues to widen. That’s a bargaining chip at worst, at best it's a refinancing pathway that could potentially save you hundreds of dollars a month.”
