RBA Holds at 4.35% But Flags Another Rate Rise

Three rises this year have already added $272/month to a $600k mortgage — and the RBA hasn't ruled out a fourth.

Australia's mortgage holders received a mixed message from the Reserve Bank of Australia this week. The cash rate stayed at 4.35%, but the minutes from the June board meeting — released on Tuesday — made clear the central bank has not taken further tightening off the table.

For borrowers who have already absorbed three rate rises in 2026, the language will be uncomfortable reading. The board described the June decision as a "cautious hold" — not a signal that the tightening cycle is finished.

What the RBA's June Minutes Actually Said

As [MPA Australia reports](https://www.mpamag.com/au/news/general/rba-signals-room-for-fourth-rate-rise-this-year/580785), the June minutes stated the board's position plainly: "The board will remain focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome, including increasing the cash rate target if necessary."

The hold, the minutes explain, was about gathering data rather than easing off. Board members judged there was "merit in using the space provided by the board's earlier decisions to raise the cash rate target to assess how the economy was adjusting and the impact of disruptions to oil supply." The Iran war, elevated government spending and persistent weak productivity growth have all contributed to keeping inflation elevated.

On inflation, the numbers are stark. May figures showed annual headline inflation running at 4% — well above the RBA's 2–3% target band — while trimmed mean inflation rose to 3.6%. Productivity, which measures economic output against hours worked, fell 0.6% in the March quarter.

Governor Michele Bullock flagged the risk directly after the June decision, describing inflation as "too high" and warning: "If expectations of higher cost growth get embedded into price and wage setting decisions across the economy, this would lead to even higher and more persistent inflation, and it would require even more tightening in monetary policy to get inflation under control." She added that the hold "does not rule out further tightening in monetary policy if that is what is required to bring inflation down."

What Three Rate Rises Have Already Cost Borrowers

Before worrying about what comes next, it is worth understanding where borrowers already stand. The three rate increases recorded since the start of 2026 have added $272 a month to repayments on a $600,000 mortgage held over a 25-year term. That is more than $3,200 a year in additional repayments compared to where the same borrower started the year.

For anyone sitting on a variable rate loan, now is a good time to check whether your current rate still stacks up. Use our [refinance savings calculator](/calculators/refinance-savings) to model what switching to a sharper rate could mean for your monthly repayments, or browse the [cheapest home loan rates](/home-loans/cheapest) currently available.

Where the Big Banks Stand on Future Rates

The major banks are split on what comes next. Commonwealth Bank of Australia, ANZ and NAB each expect rates to remain on hold for the remainder of 2026, with cuts anticipated in 2027. Westpac takes a more hawkish view: it anticipates two further increases in 2026 before two cuts in 2027.

That spread of forecasts reflects genuine uncertainty. If Westpac is correct and rates rise twice more, the monthly cost on a $600,000 mortgage climbs further still. If the other three majors are right, pressure from new rate rises is over for this year — though the existing three increases remain fully priced in.

The RBA's own framing is instructive here. The weak productivity figures, combined with unit labour costs running above their historical average during the inflation-targeting period, mean the central bank believes it still has more work to do on inflation — even if it chose to pause in June.

What Borrowers Should Do Now

No one can say with certainty whether the RBA will move again before year's end. What that means practically is straightforward: the risk of another rise remains real, and preparing now costs nothing.

If you have not renegotiated with your lender in the last six months, a sharper rate may exist elsewhere. Use our [repayment calculator](/calculators/repayment) to model what a further 0.25 or 0.50 percentage point increase would do to your monthly budget before it happens — it takes less than two minutes and gives you a concrete number to plan around.

For borrowers already stretched after three rises, waiting carries real risk. [Refinancing](/home-loans/refinance) while you still have serviceability headroom gives you more options than acting under pressure if a fourth rise arrives. The board has been transparent about what it is watching: if inflation expectations become entrenched, it will act.

The RBA's language is cautious rather than alarming. But cautious in this context means the door to further increases remains open, not closed. Borrowers who review their position now will be better placed whatever the board decides at its next meeting.