Banks Tip RBA Rate Hold in June After CPI Softens

April inflation came in softer than expected, with major banks now forecasting the RBA will keep the cash rate on hold at its June meeting.

Banks Are Backing a June RBA Pause — Here's What That Means

Australia's April inflation data came in lower than expected, and the major banks are now forecasting the Reserve Bank will keep the cash rate on hold at its June meeting, The Adviser reported in its weekly property and finance news round-up for the week ending 29 May 2026.

That prediction follows the RBA's decision in May to raise the cash rate by 25 basis points to 4.35%. For borrowers still absorbing the impact of that move — and all the rises that preceded it — a pause at the next meeting would provide meaningful breathing room, even if rates are not coming down.

The April CPI data showed headline inflation eased to 4.2% in the year to April, down from 4.6% in March, according to supporting analysis from Cotality's May housing report. A temporary halving of the fuel excise contributed to softer fuel prices and helped pull the headline figure lower. However, the RBA's preferred measure — trimmed mean inflation — edged higher to 3.4%, which is why the outlook remains genuinely uncertain. The Adviser notes that banks are split on cash rate expectations, with some analysts suggesting there may be no further rises before August.

For borrowers, the distinction between headline and trimmed mean inflation matters. The RBA has consistently focused on trimmed mean in its deliberations. A softer headline result is encouraging, but a trimmed mean still tracking above target keeps the door open for further action later in 2026.

What a Hold Means for Your Mortgage — and What to Do Now

A hold at the June meeting means the cash rate stays at 4.35%. Variable-rate borrowers will not see repayments move. But a hold is not a cut — the broader environment of high rates, stretched serviceability, and weak consumer confidence persists.

The more pressing question for most borrowers is whether they are on a competitive rate right now, regardless of where rates move next. A period of rate stability is a practical window to [compare current home loans](/home-loans/cheapest) and see whether you could be paying less with another product. You can use our [repayment calculator](/calculators/repayment) to model what a rate reduction would mean for your monthly budget before committing to anything.

The Adviser reports that the softer CPI print has given buyers a confidence boost, with a potential hold expected to steady borrowing conditions and support renewed activity. At the same time, the report notes that preliminary auction clearance rates across the combined capitals jumped only slightly last week, and an auctioneer warned against over-reading early data — buyers are still grappling with affordability pressures. That is the right note of caution. Improved rate expectations can lift sentiment, but they do not immediately reverse the impact of several years of rate rises on household borrowing capacity.

Investors Are Already Asking Questions — And Rightly So

One of the notable observations in The Adviser's weekly round-up is that brokers have been inundated with investor queries since the Federal Budget was handed down. Investor clients are reportedly flooding brokers with questions about Labor's capital gains tax and negative gearing overhaul — and that is a rational response to genuinely significant policy changes.

The Budget announced that negative gearing will be restricted to new builds from 1 July 2027, and the existing 50% capital gains tax discount will be replaced with an indexed cost base approach and a minimum tax rate on capital gains. Prime Minister Albanese has confirmed when the legislation will be introduced to Parliament, and further carve-outs beyond tech start-ups are under discussion. These are structural changes that will affect the economics of investment property, and understanding how they interact with your current loan structure matters before making any buying or selling decisions.

If you are an investor reviewing your options in light of the tax changes and the current rate environment, [exploring investor loan products](/home-loans/investor) is a sensible starting point. Your financing cost is the baseline for any return calculation.

For First Home Buyers: A Pause Changes the Calculus

For first home buyers who have been sitting on the sidelines, a potential pause in the RBA's hiking cycle changes the risk calculation. If you have been waiting for further rate hikes to drag prices lower before you act, a hold at June means that additional downward pressure may not materialise in the near term.

Sydney and Melbourne values have been softening — down 0.9% and 0.8% respectively in May — but Perth and Darwin continued rising. Nationally, rents are running 5.9% higher annually with vacancy rates at 1.5%. The case for buying versus continuing to rent does not get easier when vacancies are this tight and rent costs have risen $204 per week over five years. Our [first home buyer hub](/home-loans/first-home-buyer) covers the products and strategies suited to entry-level buyers, including low-deposit options.

The June RBA meeting result will set the tone for the second half of 2026. A hold will stabilise sentiment. What matters more over the medium term is the trajectory of trimmed mean inflation, the resilience of the labour market, and whether returning buyer confidence translates into a genuine lift in activity or just a brief reprieve.

[Source: The Adviser — Hot Property: The biggest property headlines from the week 25–29 May](https://www.theadviser.com.au/borrower/48487-hot-property-the-biggest-property-headlines-from-the-week-25-29-may)