Circle 11 August. That’s when the Reserve Bank board hands down its next cash rate decision, and for the first time in months, the experts genuinely disagree about what happens. After three hikes this year took the rate to 4.35 per cent, the question hanging over every mortgage in the country is whether the pause holds. Here’s the state of play in plain language.
The Split
Three of the four big banks, Commonwealth Bank, NAB and ANZ, expect the RBA to stay on hold through the rest of 2026, judging that three rapid hikes need time to work through the economy. Westpac stands apart, forecasting another rise in August, and potentially a further one after that, which would take the cash rate to 4.85 per cent.
The broader expert community leans cautious too: a majority of surveyed economists expect at least one more increase this year, and among them, August is seen as the most likely timing. Independent economist Saul Eslake has flagged the same tension, noting his call hinges entirely on the next inflation numbers.
The Number That Decides It
That’s the real story: the June quarter inflation figures, released in late July, will largely make this decision before the board sits down. Inflation remains above the RBA’s 2 to 3 per cent target, pushed by capacity pressures and the fuel-price shock from the Middle East conflict, and the board has been blunt about its willingness to act.
“It will do what it considers necessary to achieve that outcome,” the Reserve Bank board stated of its inflation mandate.
If the late-July inflation reading lands around 3 per cent or lower, a hold becomes very likely. Meaningfully higher, and August gets uncomfortable for borrowers.
What It Means for Your Mortgage
A hold keeps repayments where they are, elevated, but stable, and stability itself has value after a year like this one. Another 25 basis point rise would add roughly $100 a month to a typical $600,000 variable loan, on top of the increases already absorbed this year.
Either way, the practical moves are the same. Check your rate against the market now, because lenders move independently of the RBA and the gap between a loyal customer’s rate and a new customer’s rate is often the easiest money in personal finance. If your budget is already tight, stress-test it against one more rise rather than hoping, and talk to your lender early if a hike would genuinely strain you, hardship teams respond far better to early conversations than missed payments. This is general information rather than financial advice, and your circumstances matter.
For Buyers and Sellers
For buyers, the uncertainty argues for buffer over bravado: borrow with room to spare while the direction of rates is unresolved, and remember that softer prices in Sydney and Melbourne partly reflect exactly this rate environment. For sellers, an August hold would likely steady sentiment into spring; a hike would extend the buyer’s market. And for everyone waiting for relief: no major bank sees cuts before 2027, so decisions premised on rates falling soon carry real risk.
The Bigger Picture
Whatever 11 August brings, the deeper shift is that the era of guessing rates only go down is over, and households that plan for a range of outcomes rather than a prediction are the ones this cycle rewards. Watch the late-July inflation data, that’s the moment the August answer becomes visible, and we’ll be covering it when it lands.
Epik Wire covers the property market and household finances in plain language. Subscribe to our newsletter to stay informed.
