The Reserve Bank has left the cash rate steady at 4.35% today, but left the door open for another rate hike.
In the statement the Board said it would do what is necessary to achieve price stability “including increasing the cash rate target further if required”.
Impact of another 0.25 cash rate hike in 2026
If the RBA hikes again in August, it would take the cash rate to 4.60%, which would be the highest setting since 2011.
For someone with a $600,000 mortgage and 25 years remaining at the start of the hikes, a 0.25 percentage point cash rate hike in August, would increase monthly repayments by $92.
Across what would then be four hikes for the year in February, March, May, and then August, the total monthly increase would be $364.
Impact of a | ||
|---|---|---|
Loan size at | Hike in | Cumulative |
$600,000 | +$92 | +$364 |
$800,000 | +$122 | +$485 |
$1 million | +$153 | +$606 |
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 falls in August in line with Westpac’s forecast. Calculations assume banks pass on the hikes the month after. Changes are to minimum repayments.
What can borrowers do now to prepare?
While the RBA has hit pause for the first time since 2025, your mortgage rate does not have to stay stationary.
Getting just 0.25 knocked off your rate, could protect your finances from a further hike in August. Here’s how to approach the negotiations:
- Check your rate: Your target as an owner-occupier should be under 6%. It’s a stretch but there are 40 lenders offering at least one variable rate under this mark.
- Check up on your own bank: See what it’s offering new customers. This 30-second check will show if you’re paying a loyalty tax.
- Arm yourself with two counter offers: This shows your bank you’re prepared to move if needed.
- Ask your bank for a rate review: Be polite, professional, and precise.
- Be ready to walk: If they won’t budge, it could be time to switch to a lender willing to offer you its lowest advertised rate. Just make sure to factor in any switching fees before you make the leap.
Today’s pause shouldn’t be mistaken for the end of the cycle
Canstar's Data Insights Director, Sally Tindall, says, “The RBA just hit the pause button for the first time since 2025. It’s a welcome break, at least for now. However, the Board certainly hasn’t declared victory over inflation.”
“Inflation is sitting at 4.2 per cent and the RBA needs it at 2.5 per cent. While the central bank is currently treading water, there’s still a long road ahead, which could still include at least one more hike.
“By leaving the door open to another rate hike, it’s reminding borrowers that today’s pause shouldn’t be mistaken for the end of the tightening cycle.
“Westpac is forecasting another hike as early as August. If that happens, it would add another $92 a month to a $600,000 mortgage, with 25 years remaining, and pile even more pressure on households already juggling higher mortgage repayments and rising living costs.
“Borrowers shouldn’t wait around hoping rates have peaked. The banks are fiercely competing for new business, with 40 lenders on the Canstar database still offering variable rates below 6 per cent.
“If you haven’t checked your rate recently, now’s the time. There’s every chance your lender is offering a sharper rate to new customers than the one you’re paying. A quick phone call could save you far more than waiting to see what the RBA does next.
“Finally, if you score a rate cut, try and keep your repayments where they are today so you’re chipping extra into your mortgage.”
