All Four Major Banks Now Tip an RBA Rate Hike This Month
With the RBA board meeting on 28–29 September, Australia's big four banks are all forecasting a cash rate rise — here's what it means for borrowers.
ABC News reports that RBA Governor Michele Bullock used her final public appearance before the September board meeting to cement market expectations of a rate rise, speaking at a Committee for Economic Development of Australia (CEDA) event in Sydney on Tuesday.
"Between 4.5 and 5 [per cent unemployment] will probably take enough heat out of the labour market that eases pressure on inflation," she said.
Futures pricing on Bloomberg put a 90 per cent probability on a hike at next week's meeting, with roughly a 50/50 chance of a follow-up move in November. All four major banks — CBA, Westpac, NAB, and ANZ — now expect the RBA to raise the cash rate at its 28–29 September monetary policy board meeting, the first time all four have aligned on the same near-term call this cycle.
ANZ went further than the other three, tipping hikes in both September and November. If that two-move forecast plays out, the cash rate would reach 4.85 per cent — the highest level since late 2008. CBA's base case is a single 25 basis point increase to 4.60 per cent at next week's meeting, with further moves conditional on inflation data and how broader global conditions develop.
What Another Rate Rise Means for Your Repayments and Borrowing Power
The Reserve Bank has already lifted the cash rate three times in 2026, bringing it to its current level of 4.35 per cent. Another increase adds further pressure to mortgage holders and property investors already dealing with elevated living costs.
Australian Broker reports that the Mortgage & Finance Association of Australia (MFAA) has modelled what each 25 basis point rise means at the household level: a $600,000 mortgage adds roughly $100 a month in repayments with each rate increase. That is significant on its own, but there is a second consequence that borrowers do not always factor in.
MFAA chief executive Anja Pannek explained that as the cash rate rises, lenders' serviceability assessment rates typically rise in lockstep — and that directly cuts into how much a buyer can borrow.
"For a first-time homebuyer, a rate rise isn't just about higher repayments. It can also affect borrowing capacity," Pannek said. "As interest rates rise, the rate lenders use to assess serviceability generally rises too, which can reduce how much a buyer is able to borrow."
Based on MFAA's modelling, a 25 basis point increase reduces a borrower's maximum borrowing capacity by roughly $13,000. For buyers already operating near their limit, that can be the difference between securing the property they want and missing out.
"A home that fitted the budget last month can suddenly sit just out of reach," Pannek told Australian Broker.
A YouGov survey of 2,057 Australians commissioned by the MFAA found that two out of five people planning to enter the home loan market for the first time within the next three years lack confidence navigating their options — and that was before any September rate rise flows through.
Fixed Rates Are Already Pricing In the Move
Banks are not waiting for the RBA announcement before acting. Fixed mortgage pricing has moved sharply in the lead-up to the meeting. CBA lifted its two-year fixed home loan rate by 0.48 of a percentage point to 6.82 per cent, with other fixed terms rising by between 0.15 and 0.30 percentage points.
The most competitive one- and two-year fixed rates among the big four now sit at 6.49 per cent — noticeably above the major banks' variable rates, which range from 5.99 to 6.25 per cent. That spread reflects the market's expectation that rates are heading higher, not lower.
Bullock also reiterated the RBA's central focus at her CEDA address: "I think monetary policy really just needs to continue to focus on making sure that we limit indirect effects and we try to keep inflation expectations anchored."
The August unemployment data from the Australian Bureau of Statistics is due Thursday — the last major data point before the board meets. Unless it reveals a sharp rise in joblessness, a rate hike on 29 September is all but locked in.
What Borrowers Should Do Before the Decision
If you have not reviewed your home loan recently, now is the time. There is still a window before the RBA decision to compare rates and explore whether refinancing or restructuring your loan could reduce the impact of higher repayments on your household budget.
Use our refinance savings calculator to model how much you could save by switching, and check our refinance hub for the most competitive variable and fixed offers currently available across the market.
First home buyers especially should stress-test their borrowing power at 4.60 per cent — and at 4.85 per cent if ANZ's two-hike forecast materialises. Use the borrowing power calculator to understand your real purchasing budget before you make an offer, not after.