Will Rates Rise Again? Westpac Tips Two More Hikes in 2026

More than half of economists expect at least one more RBA rate rise this year, with August flagged as the most likely timing.

The Reserve Bank of Australia paused its tightening cycle at its June 2026 meeting, holding the cash rate at 4.35 per cent. But for borrowers wondering whether that means the worst is over, the market's own experts are far from settled.

MPA Australia [reports](https://www.mpamag.com/au/news/general/economists-tip-at-least-one-more-rate-hike-in-2026/579041) that more than half of economists and experts surveyed expect the RBA to lift the cash rate at least once more before the end of 2026. Of those, 62 per cent believe August is the most likely timing for the next move.

The Big Four Banks Are Split

The clearest way to understand the rate outlook is to look at where Australia's major banks are placing their bets — and they do not all agree.

Commonwealth Bank, NAB and ANZ are in the same camp. All three expect the cash rate to remain at 4.35 per cent for the remainder of 2026, with monetary easing beginning only in 2027. NAB is forecasting the cash rate will reach 3.6 per cent by the end of next year. ANZ is predicting 25-basis-point cuts in both September and December 2027, which would bring the cash rate to 3.85 per cent.

Westpac sits firmly in the other camp. It is the only major bank forecasting further tightening this year, with two additional 25-basis-point increases expected — one in August and one in September. If both moves are delivered, the cash rate would reach 4.85 per cent. That would be the highest level for the cash rate since 2011 — a level not seen for more than fifteen years, even during the post-pandemic tightening cycle.

The RBA's own June statement kept both scenarios alive. The board confirmed it "will do what it considers necessary to achieve that outcome, including increasing the cash rate target further if required." With inflation still well above the RBA's target band, the board's data-dependent approach means any strong inflation print between now and August could tip the balance toward action.

MPA Australia also notes that inflation remains elevated against the RBA's stated objective — a gap that gives the board clear room to move again if the data warrants it.

What Another Rate Rise Would Cost You

The three cash rate increases delivered in February, March, and May have already added substantially to monthly repayments for variable rate borrowers. A further move in August — as the majority of surveyed economists expect — would compound that burden.

According to analysis reported in MPA Australia, each 25-basis-point increase adds approximately $92 per month to repayments on a $600,000 mortgage with 25 years remaining. For a $800,000 loan, that figure rises to around $122 per month. Borrowers with $1 million outstanding would see an additional $153 per month per hike.

Stack up the four potential moves for the year — February, March, May, and a possible August hike — and the cumulative monthly increase reaches $364 per month for a $600,000 borrower, $485 per month on an $800,000 loan, and $606 per month for those with $1 million outstanding. For households already managing higher living costs and reduced consumer spending capacity, those figures are not abstract. They are real pressure on real budgets.

How to Protect Your Budget Before the Next Decision

Waiting to see what the RBA does before reviewing your home loan is a strategy that costs money. Whether the next move is a hike, a hold, or eventually a cut, the right loan structure makes a difference at every stage of the cycle. Here is what borrowers can do right now.

**Compare your rate against the market.** Whether rates rise further or hold at 4.35 per cent, a competitive rate is your best buffer. If you have not reviewed your home loan since early 2026, you may well be paying more than you need to. See the [most competitive home loans currently available](/home-loans/cheapest) and compare your existing rate against what is in the market today.

**Model the impact of a further hike.** Use the [repayment calculator](/calculators/repayment) to see exactly what a further 25 basis points — or the 50 basis points in Westpac's scenario — would mean for your specific loan balance and remaining term. Running this scenario costs nothing and removes the anxiety of not knowing.

**Explore refinancing now.** If you are on a variable rate that has not been competitive since before the current tightening cycle started, there may be a stronger case for switching than you realise. Our [refinance savings calculator](/calculators/refinance-savings) shows the potential benefit in dollar terms for your specific situation — including how quickly you would recover any switching costs.

**First home buyers: use uncertainty to plan, not to pause.** Rate uncertainty should prompt you to stress-test your budget across multiple scenarios, not simply to wait. Use the [borrowing power calculator](/calculators/borrowing-power) to model your capacity at 4.35 per cent and at the Westpac scenario of 4.85 per cent, so you have a clear upper bound on what you can comfortably afford regardless of what the RBA does next.

The split between Australia's major banks is significant. Three of the four believe the rate has peaked; one believes it will rise further. Borrowers cannot control which forecast proves correct. What they can control is how well their current loan positions them for either outcome.