NAB joins the RBA rate hike call for September: what an 80% probability means for first home buyers

NAB has become the latest major bank to forecast a Reserve Bank rate rise this month, joining a growing list of economists now expecting a 0.25 percentage point increase at the board's meeting on 29 September. Market-implied odds of a hike have climbed to around 80%, and Deputy Governor Andrew Hauser used a television interview this week to say the central bank is not ruling a further move out. For anyone weighing up a home loan right now, that combination of a bank formally changing its call and a senior RBA official talking openly about more tightening is worth paying attention to.

What changed this week

NAB now expects the cash rate to rise to 4.60%, putting it alongside Deutsche Bank, UBS and Morgan Stanley in tipping a September move, while some other major banks are still pencilling in November instead. Deputy Governor Hauser, appearing on the ABC's 7.30 program, acknowledged that many Australians are frustrated with how long inflation is taking to come down, and said the bank's job is simply to bring it back under control. He stopped short of calling a hike inevitable, but pointed to three upside risks the board is watching: further conflict in the Middle East, an unexpected AI-driven investment boom, and ongoing weakness in the economy's supply capacity.

None of this guarantees what the board will actually decide. Bank forecasts have shifted more than once already this year, and market-implied odds can move again before the meeting. But the direction of travel over the past fortnight, from rising probability estimates to a formal change in a major bank's official call, is the kind of build-up that has preceded previous rate moves.

Why this matters more for buyers than existing borrowers

• Borrowing power is assessed with a buffer. Lenders test your ability to repay a loan at a rate above what you'd actually pay, so a rate rise, or even the expectation of one, can affect how much a lender is willing to approve before anything officially changes.
• Repayments move quickly for variable loans. A 0.25 percentage point rise adds roughly $91 a month to repayments on a $600,000 mortgage, a useful reference point when you're working out what you can comfortably afford rather than what you might be approved for.
• Pre-approvals can go stale. If you were assessed before this run of forecast changes, it's worth checking with your lender or broker whether your approval still reflects current conditions.

What this means for first home buyers

A single week of bank forecasts and one interview does not settle what the Reserve Bank will do on 29 September. Even so, there are a few practical steps worth taking while the outcome is still uncertain, rather than waiting until after the decision is made:

• Test your repayments and borrowing capacity at a rate a notch above today's, so a possible hike doesn't come as a surprise.
• If you're close to signing, ask your lender or broker how a further rate rise would affect your specific application and buffer.
• Weigh up fixed, variable and split-rate options with a professional who can factor in your own income, deposit and timeline. General information like this can flag the trend, but it cannot tell you which option suits your circumstances.

Run the numbers

Rather than guessing at the impact of a possible rate change, test it against your own figures:

• Interest Rate Shock Tester - see how your repayments and budget would hold up if the cash rate rises again
• Borrowing Power Calculator - check how a higher assessment rate could change what a lender may be willing to approve
• Am I Ready to Buy? - get a general read on whether your finances and buffer suit buying while rates are still uncertain