Will home loan rates drop in 2026?

The RBA cash rate sits at 4.35% p.a. after three 2026 hikes and two consecutive holds. The path so far, what the big four are forecasting, and what to do with your rate now.

6 min read·Reviewed 17 August 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 both its 16 June and 11 August meetings, and the big four banks' economics teams have now largely converged on a hold for the rest of the year, 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, and held again at its 11 August meeting, the second consecutive hold.

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 have moved closer together since mid-2026. Commonwealth Bank, NAB and ANZ expect the cash rate to hold for the rest of 2026, and Westpac's economics team dropped its earlier further-hikes call at the end of July 2026, now seeing only a residual risk of one more rise 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.

Bank	2026 cash rate call	First forecast cut
ANZ	Extended hold through August and beyond	Not yet specified
Commonwealth Bank	Hold for the rest of 2026	Two cuts forecast in 2027 (May and August)
NAB	Hold for the next few quarters	H1 2027
Westpac	No further hikes expected in 2026; residual risk of one November rise	From around August 2027

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 point to review. Compare your current rate with like-for-like rows using the same purpose, repayment type, rate type and LVR, then include switching costs and the remaining loan term. A dated verified snapshot can show the rate gap, but it does not prove refinance eligibility or an individual saving.