RBA Set to Hold in August: What Every Borrower Should Do

Nine in 10 economists expect the RBA to pause in August, but nearly half still forecast another rate rise — here's what to do before they meet.

The Reserve Bank of Australia is set to hold the cash rate at 4.35% at its August 2026 board meeting, according to a monthly survey of 38 economists and experts in which 92% of panellists — 35 of 38 — predicted no change this month.

Property Update reports on the survey, which reflects a clear consensus for a pause following three cash rate rises earlier in 2026. For millions of Australians on variable-rate home loans, a second consecutive hold would be welcome. But the picture beneath the headline figure is more complicated, and the experts surveyed are careful to separate a rate hold from genuine relief.

A pause is not a cut. And it is not an invitation to relax.

A Hold Is Not the Same as Relief

Richard Whitten, a money and home loans expert quoted in the survey, put the situation plainly: "Interest rates are as high as they've ever been in recent history. And with higher house prices, this makes repayments incredibly expensive."

His data backs that up. Survey results show 38% of homeowners reported struggling to pay their mortgage in July 2026 — more than one in three Australians on a home loan under genuine financial pressure, without any additional rate increase.

The survey also shows 44% of experts still expect at least one more rate rise before the end of 2026. That's down from 55% who held that view the previous month, but it remains a substantial minority. With almost half the expert panel still calling for further tightening, borrowers who treat a hold as the end of the cycle are taking a risk.

Saul Eslake from Corinna Economic Advisory pointed to the inflation data as the key factor for August. The underlying inflation rate for the year to the June quarter came in at 3.5%, which he said was "sufficiently below the RBA's own most recent forecast" to justify a pause. Even so, he was clear: at 4.35%, monetary policy settings remain restrictive, and the Board retains a tightening bias.

Shane Oliver from AMP agreed. "Slightly softer than expected June quarter underlying inflation, along with slightly weaker than expected labour and housing market conditions, should allow the RBA to remain in 'wait and see' mode this month," he said — but with inflation "remaining way too high," a tightening bias was likely to persist.

ANZ's Madeline Dunk noted that trimmed mean inflation had printed "below the RBA's expectations in Q2" and that, alongside a higher-than-expected unemployment rate, the data gave the RBA "space to see how the economy will evolve from here." Bendigo Bank's David Robertson suggested the Board could "take another breather" while maintaining its stance until core CPI returns below 3% — a milestone he doesn't expect before late 2027. University of Sydney's James Morley was blunt: the next direction for rates is uncertain, and could be up.

What's Still Driving Inflation

Beneath the encouraging headline CPI figures, several cost pressures are still building. Electricity prices are up 21.6% over the past year. Gas is up 7.8%. Tobacco has risen 11.6%, while recreation and holiday travel costs climbed 7.5% — categories that are partly government-influenced and partly structural.

Fuel is a particular wildcard. The halved fuel excise recently expired, with reports of petrol prices in Brisbane jumping from around $2.00 to roughly $2.50 per litre almost overnight. That spike won't appear in the June quarter CPI data the RBA assessed at this meeting — but it feeds directly into the September quarter read, the numbers the Board will be scrutinising before its next decision.

Wages are providing limited relief. Annual wages growth has run at 3.3% over the past 12 months, while CPI inflation came in at 3.8% over the same period. In real terms, household purchasing power is going backwards even as nominal incomes technically rise. For borrowers already stretched by higher repayments, this gap compounds month by month.

In the property market, 41% of experts surveyed attributed recent falls in Sydney and Melbourne prices primarily to rate hikes and higher interest rates, while 34% pointed to the negative gearing and capital gains tax reforms. Just 23% of experts believe those tax reforms are actually improving housing affordability or adding to new supply.

What to Do Before the Next Decision

A rate hold creates a window — and windows don't last. If you haven't reviewed your home loan in the past 12 months, your rate may have drifted well above what lenders are currently offering new customers. Use our refinance savings calculator to see what switching could save each month.

For first home buyers watching the Sydney and Melbourne markets, softening prices may represent a genuine entry opportunity as experts attribute the falls to rate pressure. Understanding your borrowing capacity at today's rate is a practical first step — try our borrowing power calculator before conditions shift again.

If you're an investor reassessing your portfolio at the current rate level, take a look at what's available through investor home loans right now. Lenders are actively competing for business, and there may be scope to negotiate a meaningfully better rate — whether you stay put or move your loan elsewhere.

The August decision is expected on Tuesday afternoon. The hold may arrive quietly. The fundamentals, however, reward action over waiting.

Property Update reports on the full cash rate survey of 38 economists and experts, including individual forecasts and views on the housing market, tax reforms, and the inflation outlook for the remainder of 2026.