Three Rate Rises In, Experts Predict What the RBA Does Next

The cash rate is sitting at 4.35% after three hikes in 2026. Brokers and lenders share their August outlook — and what it means for your repayments.

Australia's Reserve Bank has been unusually active in 2026. Three official cash rate increases earlier in the year pushed the rate to 4.35%, and at the June meeting the board held firm, saying it needed to see how those previous rises were flowing through the economy. Now, with the August meeting closing in, the market is placing bets — often contradictory ones.

Australian Broker reports that the industry remains deeply divided. Economists, lenders, and frontline brokers are weighing the same economic signals and arriving at markedly different conclusions. Understanding where rates may go from here has a direct impact on your monthly repayments and your medium-term borrowing strategy.

Where Things Stand: Three Hikes, One Hold

When the RBA held in June, it was not because inflation was beaten — the board was buying time, assessing whether the three prior increases had done enough work. Since then, the picture has only grown more complex.

Inflation has remained stubborn. The labour market has stayed resilient. Wages are rising. The May Budget introduced major changes to investor tax settings that are reshaping housing demand, adding a policy variable the RBA has to account for on top of the usual macro signals. Global uncertainty continues to cloud the horizon.

For borrowers, the practical question is simple: should you expect another rate rise, a prolonged hold, or the beginning of rate cuts? The answer depends on who you ask.

What Brokers and Lenders Are Predicting

The dominant view is a hold in August — but the reasoning and longer-term outlook vary considerably across the industry.

Richard Collier, Chief Financial Officer at Heartland Bank, put the consensus case plainly: "A hold remains the most likely outcome in August. The RBA is weighing improving inflation outcomes against a gradually weakening economy. Inflation is moving in the right direction, but not convincingly enough to support a rate cut, while softer growth reduces the likelihood of further hikes. For now, the board is likely to stay on the sidelines and wait for more data."

Bianca Patterson, a mortgage broker and finance specialist at Perth-based Calculated Lending, echoed the call for stability: "I hope to see the RBA hold the cash rate at its August meeting, as we need a period of stability rather than moving too quickly in either direction. While borrowers would welcome some interest rate relief, there has not yet been enough time to see the full effect of the three consecutive rate rises."

Patterson highlighted why a quick reversal would send the wrong signal: "Cutting rates only two meetings after three consecutive rises would feel premature, particularly if any significant movement in the data could be temporary or reflect an initial reaction to the announcement of the proposed federal budget measures."

Ruth Van Eekelen, a franchise broker at Aussie Home Loans in Victoria's Bellarine Peninsula, offered a ground-level observation. Rather than cutting back on spending when budgets tighten, many of her clients are choosing to earn more instead. "One thing that has really stood out to me is that, rather than looking to cut back on their spending, many people are choosing to solve the affordability challenge by working more or increasing their income," she said. That creates an uncomfortable possibility: if households maintain spending by earning more rather than consuming less, demand stays elevated and inflation proves stickier than expected.

Janine Ashmore, co-founder and director of Darwin-based Bliss Home Loans, also called for a hold, drawing on a practical market signal: some fixed rates have started easing. "I have seen some fixed rates lower too, which indicates that lenders perhaps think so as well," she said — a subtle but meaningful cue that parts of the market are already pricing in rate stability or decline.

Not everyone agrees the cycle has turned. Scott Bament, a Mortgage Choice broker in South Australia's Morphett Vale, told Australian Broker he is forecasting "up to two more rate increases this year" — while acknowledging he is "not 100% convinced" even one more hike comes. He noted that the federal budget changes have arguably had more market impact than the rate rises themselves.

The Case That Rates Have Already Peaked

The most detailed argument for an early pivot came from Curtis Stewart, Head of Strategy and partner at Flint Group, who frames the debate differently from most: "We think the RBA holds at the August meeting, and that the next move in the cash rate from here is down, rather than up."

His reasoning centres on evidence that the three 2026 rate rises are already doing significant work. Property transactions are down as much as 20 per cent in parts of the market. Credit growth is forecast to slow sharply. Consumer confidence is sitting at multi-decade lows.

"That points to an economy that's already feeling the effects of tighter policy, rather than one that needs further tightening," he said. His base case is a cutting cycle beginning after August — potentially with multiple cuts through to the end of 2027 as policy moves back toward a neutral setting. "For buyers and investors, the practical read is, plan around the possibility of lower rates ahead, not another hike."

What Borrowers Should Do Now

For most variable rate borrowers, the near-term message is one of relative stability: a hold in August is the consensus expectation, and repayments are unlikely to change before that meeting. But stable repayments are not the same as optimal ones.

If a cutting cycle follows in 2027, lenders typically begin repricing products in anticipation — meaning the sharpest variable rates on offer can shift well before the RBA actually moves. Reviewing what home loan rates are available right now gives you an accurate read on where the market sits relative to your current rate.

For borrowers weighing a refinance, the timing question is real: move now into a sharper deal, or wait to see if the cutting cycle delivers better rates? Both approaches have merit depending on your loan size, remaining term, and break costs. Running the numbers through a borrowing power calculator helps you pressure-test different scenarios before committing.

The broader lesson of three hikes in 2026 is that rate certainty is rarely as durable as it appears. Making proactive decisions when conditions are relatively stable tends to produce better outcomes than reacting under pressure.

Source: Australian Broker