Cash Rate at 4.60%: Are We Finally Near the Peak?
Economists and mortgage brokers give their read on whether today's RBA hike is the last, and why mid-2027 is the earliest borrowers should expect rate relief.
The Reserve Bank of Australia's decision to lift the cash rate by 25 basis points to 4.60 per cent — its fourth increase of the year and the highest level since November 2011 — is forcing a candid conversation among mortgage brokers and economists about whether the tightening cycle is almost over.
MPA Australia spoke to senior voices across the industry on the day of the call. Their verdict: the peak is probably close, but do not count on rate cuts any time soon.
Where Economists Put the Rate Peak
AMP chief economist Shane Oliver said the RBA has "most likely reached the top of the cycle" — but cautioned that the risk of a further hike remains "very high." His base case is that the RBA has "probably now done enough to weaken demand sufficiently to push inflation back to target by the end of next year."
Oliver pointed to a string of signals suggesting the economy is slowing: falling home prices, a softening jobs market and rising recession risks. He noted that the share of household income going to mortgage interest payments is already approaching its 2024 highs, and that household spending was flat in August.
But he also laid out the reasons the RBA would stay hawkish. Trimmed mean inflation remains at 3.6 per cent, well above the two-to-three per cent target band. Wage costs are rising. Oil prices are higher. Inflation has been above target in five of the past six years. And money markets are signalling a 70 per cent probability of a further increase by June 2027.
Oliver does not expect the RBA to start cutting until around August 2027. He also warned against swinging too far toward pessimism: "Just as many (including me) got too optimistic on rates last year, many may now be getting too pessimistic."
Joseph Daoud, founder of It's Simple Finance, told MPA Australia he broadly shares that view. "My view is we're near the peak right now, though I wouldn't rule out one more rise before we get there. I'd say we won't see a cut until mid-2027."
Anthony Waldron, chief executive of Mortgage Choice, said today's decision was expected. "The Reserve Bank's decision to raise the cash rate is unsurprising. It comes off the back of the latest CPI data, which shows inflation has remained stubbornly high. RBA officials have made it clear that the Board is determined to bring inflation down. Until the RBA is satisfied that inflation is trending in the right direction, there is a risk that rates could rise further."
How the Hike Is Reshaping Buyer Behaviour
For a borrower with a $600,000 mortgage and 25 years remaining, the latest rise adds approximately $91 a month to minimum repayments if their lender passes it on in full. Macquarie Bank has already confirmed it will do exactly that on 15 October.
Brokers report that buyers are becoming more cautious about how much they borrow, rather than leaving the market altogether. Maddie Walton, mortgage broker at Money Lounge, told MPA Australia: "For first home buyers in particular, the conversation has shifted from 'where are rates heading?' to 'what can I comfortably afford today?'"
"Even a small increase can affect borrowing capacity and triggers buyers to reassess their price range, or take a little longer to build their buffer," she said. Walton also noted that the buyers still moving forward are those who "understand their numbers, have a clear budget and are making decisions based on what's sustainable for them, rather than trying to time the next rate move."
Australian Bureau of Statistics data bears this out. Investor loans fell 8.6 per cent in the June quarter of 2026, the largest fall since the September quarter of 2022. The number of new first home buyer loans, however, was unchanged from a year earlier.
"So not everyone has stopped. It's mostly investors who've stepped back, and they tend to come back the moment rates turn," Daoud said.
If you want to understand how today's rate change affects your own position, our borrowing power calculator is a good starting point. The repayment calculator can show you what the monthly difference looks like across different loan sizes.
What Borrowers Should Do Right Now
Mark Haron, executive director at aggregator Connective, framed the response clearly: "Brokers can review a client's loan, compare alternatives, and help borrowers work out what practical options are available before financial pressure becomes more difficult to manage."
Waldron echoed the practical advice: "If it's been over a year since you reviewed your home loan, speak to your mortgage broker to understand whether it's still the right one for you."
For borrowers worried about meeting repayments, Daoud's message was direct: "Call your lender before you miss a repayment, not after. Every lender is legally required to consider a hardship application. Options include things like pausing repayments, extending your term, switching to interest-only repayments. It puts you in a far stronger position than going quiet for three months."
If your lender will not engage, the Australian Financial Complaints Authority (AFCA) can review the matter at no cost to you. The National Debt Helpline on 1800 007 007 also provides a free financial counsellor who can negotiate with your lender on your behalf.
Reviewing your loan now — rather than waiting for further pressure — gives you the most options. Compare current rates on the refinance page or check where today's rates sit on the cheapest home loans page.
The full industry analysis is available at MPA Australia.