RatesniffersRATESNIFFERS
LoginSign up
Mortgage Basics

Will home loan rates drop in 2026?

The RBA cash rate sits at 4.35% p.a. after three hikes earlier in 2026. Here's the cash rate path so far, what the big four banks are forecasting, and what to do with your own rate while you wait.

6 min read·Reviewed 9 July 2026·Ratesniffers Editorial Team

Will home loan rates go down in 2026?

Most likely not this year. The Reserve Bank of Australia raised the cash rate three times in the first half of 2026 before holding it at 4.35% p.a. at its 16 June meeting, and the big four banks' economics teams are largely split between another hold and one further increase before year end, not a cut. A genuine cash rate cut, and the variable-rate fall that follows it, is more commonly forecast for 2027 if inflation keeps easing.

That doesn't mean every home loan rate is frozen in the meantime. Fixed rates move ahead of the cash rate, because they're priced off where markets expect the cash rate to sit over the fixed term, so a fixed rate can fall (or rise) months before the RBA actually moves. Variable rates only move once the RBA does.

What has the RBA cash rate done in 2026?

The cash rate started 2026 at 3.60% and was lifted by 25 basis points at three consecutive board meetings, 3 February, 17 March and 5 May, taking it to 4.35% p.a., a full percentage point of tightening in five months. The Monetary Policy Board then held the cash rate at 4.35% at its 16 June 2026 meeting, a decision it described as a pause rather than a pivot.

Each 25 basis point cash rate move typically flows through to lenders' standard variable home loan rates within days to a few weeks, as lenders reprice their variable products to match.

What are the big four banks forecasting for the rest of 2026?

Bank economics teams aren't unanimous. Commonwealth Bank, NAB and ANZ currently expect the cash rate to hold for the rest of 2026, while Westpac's economics team is forecasting one further increase before year end. Where the big four largely agree is on timing for relief: each bank's own published forecast points to the first cash rate cut arriving in 2027, not 2026, contingent on inflation data continuing to cool.

Bank2026 cash rate callFirst forecast cut
ANZHold for the rest of 2026September 2027
Commonwealth BankHold for the rest of 2026May 2027
NABHold for the rest of 2026June 2027
WestpacOne further increase in 2026Not yet specified
Bank forecasts shift as fresh inflation data lands. Treat any single call as a working assumption, not a guarantee, and re-check closer to your own fixed-rate decision.

Should I fix my rate now if a cut is further away?

If the market genuinely isn't pricing a cash rate cut until 2027, a fixed rate taken out today may not be meaningfully cheaper than one taken out closer to an actual cut, and it locks you out of any variable-rate fall if the RBA moves sooner than forecast. The trade-off is repayment certainty now against flexibility later, and it comes down to how much a further rate rise would strain your budget versus how much you value being free to switch the moment variable rates do fall.

A growing number of borrowers split the difference: fixing part of the loan and leaving the rest variable, so a portion of the loan benefits immediately if variable rates move first.

What should I do with my home loan while I wait?

Waiting on a cash rate cut isn't the only lever available. Ratesniffers tracks 3,826 home loan products across 85+ lenders, refreshed daily, and the gap between the cheapest and most expensive comparison rate on the panel is often wider than any single RBA move, so refinancing today can outweigh waiting a year or more for a cut that may not land until 2027. Checking where your current rate sits against the sharper end of the market costs nothing and doesn't depend on the RBA doing anything at all.

Advertisement

Will home loan rates drop in 2026?: frequently asked questions

Will home loan rates go down in 2026?

Most likely not this year. The Reserve Bank of Australia raised the cash rate three times in the first half of 2026 before holding it at 4.35% p.a. at its 16 June meeting, and the big four banks' economics teams are largely split between another hold and one further increase before year end, not a cut. A genuine cash rate cut, and the variable-rate fall that follows it, is more commonly forecast for 2027 if inflation keeps easing. That doesn't mean every home loan rate is frozen in the meantime. Fixed rates move ahead of the cash rate, because they're priced off where markets expect the cash…

What has the RBA cash rate done in 2026?

The cash rate started 2026 at 3.60% and was lifted by 25 basis points at three consecutive board meetings, 3 February, 17 March and 5 May, taking it to 4.35% p.a., a full percentage point of tightening in five months. The Monetary Policy Board then held the cash rate at 4.35% at its 16 June 2026 meeting, a decision it described as a pause rather than a pivot. Each 25 basis point cash rate move typically flows through to lenders' standard variable home loan rates within days to a few weeks, as lenders reprice their variable products to match.

What are the big four banks forecasting for the rest of 2026?

Bank economics teams aren't unanimous. Commonwealth Bank, NAB and ANZ currently expect the cash rate to hold for the rest of 2026, while Westpac's economics team is forecasting one further increase before year end. Where the big four largely agree is on timing for relief: each bank's own published forecast points to the first cash rate cut arriving in 2027, not 2026, contingent on inflation data continuing to cool.

Should I fix my rate now if a cut is further away?

If the market genuinely isn't pricing a cash rate cut until 2027, a fixed rate taken out today may not be meaningfully cheaper than one taken out closer to an actual cut, and it locks you out of any variable-rate fall if the RBA moves sooner than forecast. The trade-off is repayment certainty now against flexibility later, and it comes down to how much a further rate rise would strain your budget versus how much you value being free to switch the moment variable rates do fall. A growing number of borrowers split the difference: fixing part of the loan and leaving the rest variable, so a…

What should I do with my home loan while I wait?

Waiting on a cash rate cut isn't the only lever available. Ratesniffers tracks 3,826 home loan products across 85+ lenders, refreshed daily, and the gap between the cheapest and most expensive comparison rate on the panel is often wider than any single RBA move, so refinancing today can outweigh waiting a year or more for a cut that may not land until 2027. Checking where your current rate sits against the sharper end of the market costs nothing and doesn't depend on the RBA doing anything at all.

References

Related guides

Compare the rates this guide explains

Live rates refreshed daily, ranked by comparison rate.

Put this guide into action

Compare actual rates, track the market, or model the numbers.

Want this applied to your scenario?

A 30-min broker consult turns this guide into specific numbers for your situation , no fees, no obligation.

Talk to a broker