Annual inflation eased to 3.8% in the June quarter with the trimmed mean steady at 3.6%, the last major reading before the Reserve Bank's 11 August cash rate decision. Here's what the numbers could mean for your mortgage rate.
The Australian Bureau of Statistics has confirmed that annual inflation eased to 3.8% in the year to June 2026, down from 4.0% the month before. The trimmed mean, the measure the Reserve Bank watches most closely for underlying price pressure, held steady at 3.6%. For anyone watching mortgage rates, the timing matters: the Reserve Bank's next cash rate decision lands on 11 August 2026, and this was the last major inflation reading the board will see beforehand.
The quarterly movement in the Consumer Price Index was 0.6%, a cooler outcome than the market had been bracing for after three consecutive cash rate rises earlier this year pushed borrowing costs higher. Housing remained the single largest contributor to annual inflation, up 6.8%, followed by food and non-alcoholic beverages and recreation and culture, both up 3.3%. On the more encouraging side, annual transport inflation slowed sharply to just 0.1%, driven by automotive fuel prices falling for three straight months between April and June.
In other words, the cost pressure in this data is concentrated in housing itself, a familiar and frustrating loop for first home buyers: the same market they are trying to enter is also a driver of the inflation figures shaping whether their future mortgage rate goes up, down, or stays where it is.
The Reserve Bank held the cash rate at 4.35% at its June meeting, its first pause of the year after three consecutive hikes in February, March and May. Heading into that pause, the major banks were split on what comes next. CBA, ANZ and NAB have all pencilled in a cut sometime from mid-2027, while Westpac has stood apart as the sole major bank still forecasting further hikes, pointing to August and September as live possibilities.
None of this guarantees a particular outcome on 11 August. The Reserve Bank weighs a wide range of data beyond a single inflation print, and your bank or broker will have the most current read on market pricing closer to the decision.
A cooler inflation print is broadly reassuring if you are worried about another rate rise landing on top of your mortgage application, but it is not a signal to change your plans on its own.
As always, a mortgage broker or your lender can walk you through how the current rate environment applies to your specific borrowing capacity and loan structure.
Use these tools to see how today's rate environment, and a possible August move, could affect your own numbers: