Big four banks flip: three now expect another rate hike, not a cut

Three of Australia's four major banks have just reversed their call on where interest rates are heading. NAB, CBA and ANZ now expect the Reserve Bank to lift the cash rate again before the end of the year, only weeks after most forecasters were talking about a possible cut. For anyone budgeting for a first home purchase, that is a meaningful shift worth understanding, since it changes how much buffer to build into a borrowing plan.

What changed

The Reserve Bank held the cash rate at 4.35% at its 11 August 2026 meeting, the second consecutive hold after three earlier increases this year. At the time, the RBA signalled that inflation risks were tilted to the upside and that the board would respond with a rate rise if those risks showed up in the data.

Since then, fresh inflation figures have come in hotter than the Reserve Bank had pencilled in, and the major banks have moved quickly to update their forecasts:

• NAB now expects a hike at the RBA's late-September meeting, with economists flagging a real chance of a further increase in November if activity data stays resilient.
• CBA and ANZ have also moved off their hold forecasts and now expect a rate rise by the November meeting.
• Westpac has not changed its view so far and continues to expect rates to stay where they are, so the banks are not unanimous.

Why the sudden change of view

The trigger is the underlying inflation trend rather than any single headline number. Economists point to the trimmed mean measure, the Reserve Bank's preferred gauge of ongoing price pressure, tracking well above what the central bank had forecast for the September quarter. Combined with resilient household spending, that has been enough to convince three separate bank research teams that another increase is more likely than not, even though most of 2026 had been framed around rates possibly starting to ease.

It is worth remembering these are forecasts, not settled outcomes. The Reserve Bank makes its own independent decision at each meeting based on the data available at the time, and bank economists have revised their calls more than once already this year as new figures have come in.

What this means for first home buyers

A forecast is not a guarantee, but it is a useful prompt to stress-test your own numbers before you commit to a purchase or a loan approval. A further increase in the cash rate would flow through to variable home loan rates and could also reduce how much a lender is willing to approve, since serviceability tests are based on your ability to repay at higher rates.

• If you are mid-way through the buying process, check how a possible rate rise would affect your monthly repayments before you sign anything, rather than assuming your current quote is fixed for the life of the loan.
• If you are still saving, build a small buffer into your budget for repayments above today's rate, so an increase in September or November does not derail your plans.
• Ask your lender or broker how a rate rise would change your approved borrowing amount, since a shift in the cash rate can affect the maximum loan size a lender will offer, not just the size of your repayments.

Run the numbers

These tools can help you see how a further rate rise could affect your own situation before you lock in a purchase:

• Interest Rate Shock Tester - see what your repayments could look like if rates rise again in September or November.
• Borrowing Power Calculator - check how a higher interest rate could change what a lender may be willing to approve.
• Mortgage Offset Calculator - see how an offset account could soften the impact of further rate rises on your loan over time.