Big four banks unite on interest rate call this week
Updated . First published at
The big four banks are united on what will happen to the national interest rate this week, but beyond that, opinions remain divided.
The Reserve Bank of Australia board meets today and tomorrow and Westpac, ANZ, CBA, and NAB all predict it will decide to leave interest rates unchanged at a years-long high of 4.35 per cent.
The RBA is tipped to leave rates on hold this week. iStock
The pause would follow three consecutive hikes in the national cash rate, as the RBA seeks to quash inflation.
“The Reserve Bank is almost certain to leave the cash rate on hold next Tuesday for the first time in 2026,” Canstar.com.au data insights director Sally Tindall said.
“ANZ is the final big four bank to shift its stance on the cash rate, moving from expecting an extended period of hold to now forecasting rate cuts on the horizon.”
However, when those rate cuts will come remains a matter of difference.
ANZ has updated its forecast to include two cuts of 0.25 per cent to the cash rate in 2027, taking it down to 3.85 per cent.
Previously, ANZ had expected rates to hold steady at 4.35 per cent for a prolonged period.
Meanwhile, Westpac says it expects the RBA to push the cash rate up in August and September this year, with cuts only to come in 2028.
A 0.25 per cent increase in August would increase monthly repayments by $92 for somebody with a $600,000 mortgage over 25 years.
That would amount to a $364 monthly hike so far in 2026, with three more RBA meetings yet to come before Christmas.
“The big four now all have pencilled in cash rate cuts, but they’re still a long way from singing from the same song sheet,” Tindall said.
“This divide highlights just how uncertain the economic outlook remains. Inflation is still well above the Reserve Bank’s target band and global tensions are still elevated, keeping the board firmly in wait-and-see mode.
“If you’ve got a mortgage, make sure you’re still preparing for further hikes until inflation gets well and truly back into the highly evasive target band.”
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