Interest rate forecast and predictions for 2026
The nation’s big four banks are confident we’ll see further cash rate rises in 2026.
01 Apr 2026
The nation’s big four banks are confident we’ll see further cash rate rises in 2026.
What is happening with the cash rate?
Last year, variable rate borrowers were offered a measure of reprieve when the Reserve Bank of Australia cut the cash rate three times, but it seems that the era of cuts is well and truly over.
With inflation once again on the rise, the RBA hiked the cash rate at its February 2026 meeting, and again in March. With fresh uncertainty thanks to the ongoing conflict in the Middle East, at least one more rise seems imminent.
Will Australians see rate cuts in 2026?
With rate cuts unlikely in the near future, the question now becomes when and by how much rates might rise again.
Following the RBA’s March meeting, at which the cash rate was raised by 25 basis points, the bank’s board noted that inflation “picked up materially” in the second half of 2025.
The board also noted that “the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation.”
“Developments in the Middle East remain highly uncertain,” the board’s statement continued, “but under a wide range of possible scenarios could add to global and domestic inflation.”
Against this backdrop, further rate hikes in 2026 appear likely.
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 a rise of 25 basis points in May, bringing the cash rate t0 4.35%.
- CBA currently predicts a rise of 25 basis points in May, bringing the cash rate t0 4.35%.
- NAB currently predicts a rise of 25 basis points in May, bringing the cash rate t0 4.35%.
- Westpac currently predicts a rise of 25 basis points in May, and two more in June and August, bringing the cash rate t0 4.85%.
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 May 5 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 given comments by the board, the RBA could well choose to hike in May.
If fuel prices remain high thanks to the ongoing conflict, then it seems likely that the RBA will hike again in 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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