RBA Holds at 4.6%: No Rate Relief Before 2027
Bendigo Bank's chief economist forecasts a cash rate freeze through the rest of 2026, while Westpac warns of a possible further rise as early as November.
Australia's cash rate is sitting at 4.6% — its highest level since 2011 — and the question on every borrower's mind is the same: when does it stop?
According to Bendigo Bank's October 2026 Economic Update, the short answer is: not yet. The bank's chief economist David Robertson expects the RBA to hold at 4.6% for the remainder of 2026, with no changes anticipated at the November or December board meetings — provided upcoming jobs and inflation data hold no major surprises.
What Robertson was emphatic about, though, is that a pause is not a pivot. Borrowers "should not anticipate rapid easing in the near term," he said, stressing the RBA needs to see consumer price inflation back under 3% during 2027 before rates can come down. For anyone hoping the worst is behind them, that's a sobering reality check.
The rise to 4.6% was the RBA's fourth increase in eight months — a relentless tightening cycle driven by a combination of high global oil prices, record diesel costs, a tight labour market, strong government spending, and weak productivity growth.
Why the RBA Kept Raising
The pressures pushing the RBA's hand are global as well as domestic. Robertson pointed to a worldwide boom in technology investment, with private companies competing against governments for workers and capital — adding inflationary pressure well beyond Canberra's control.
The Australian dollar has slipped back below 70 US cents on expectations of higher US interest rates in 2027, making imported goods more expensive and complicating the RBA's task. Australian share markets, paradoxically, have kept setting records — Robertson attributed this to confidence that technology spending will eventually translate into productivity gains, though that benefit sits well in the future.
None of this helps the borrower sitting across the table from a mortgage renewal notice.
Westpac Is Not Convinced the Cycle Is Over
Not everyone agrees the rate cycle is pausing. Westpac forecasts a further increase at the RBA's 2–3 November meeting. If that forecast proves right, the standard variable mortgage rate would exceed 9% for the first time since 2008 — a level many current borrowers have never experienced.
Even within Bendigo's own data, the mood is deeply anxious. The Westpac–Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 in October. Just over 80% of people surveyed after the RBA's most recent decision expect mortgage rates to keep rising over the next year — up sharply from 63% in September. That shift in expectations matters: when most borrowers are braced for more pain, they pull back on spending, which is what the RBA wants — but it also accelerates the household budget squeeze.
The Pressure on Household Budgets
The strain on Australian households is real. Property prices are softening. Transport costs have climbed since the federal government's temporary fuel excise relief ended in August. Household spending has stalled. Robertson described "a growing strain on family budgets across Australia," with consumer confidence now more than 12% lower than a year earlier.
For owner-occupiers on variable rate loans, each RBA move flows through quickly. Fixed-rate borrowers rolling off 2-year terms taken out during the low-rate era of 2022 are also facing significant payment shock as they reset to today's pricing.
What Borrowers Should Do Now
A rate hold — even a temporary one — creates a window to act.
**Check your current rate.** If you haven't reviewed your loan in the past 12 months, there's a good chance you're not on the sharpest rate in the market. Use the repayment calculator to see exactly what you're paying each month, then compare the cheapest home loans to benchmark against what's currently available.
**Run the refinance numbers.** Even at today's elevated rates, switching from a rate that's 0.5% above the current best adds thousands of dollars in unnecessary interest annually on a typical loan. The refinance savings calculator can give you the dollar figure within minutes.
**Don't wait for the RBA to rescue your budget.** MPA Australia reports that Robertson said the central bank will need to see "a lot more progress with inflation before rates can be lowered" — meaningful relief is unlikely before late 2027. Locking in a more competitive rate today means you'll benefit from every RBA cut when they eventually arrive, and you stop overpaying in the meantime.
**Explore your refinancing options.** With competitive lenders still looking to write new business, there are opportunities for borrowers who have built up equity and maintained a clean repayment record to move to a meaningfully better product.
The RBA's mandate is to get inflation back under 3%. Until that job is done — which Robertson puts no earlier than 2027 — the best thing a borrower can do is ensure they're not paying a cent more than necessary on their current loan.