Rates tipped to hold steady in early Christmas reprieve for borrowers

Economists are predicting there will not be another rate rise ahead of Christmas, giving a glimmer of hope to millions of mortgage holders across country.

The majority of panellists surveyed for Finder's RBA Cash Rate Survey found 31 of 38 experts believe the Reserve Bank (RBA) will hold the cash rate at 4.35 per cent.

It comes days after the Organisation for Economic Co-operation and Development latest economic outlook predicted rates would stay steady until at least the third quarter of next year.

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Finder head of consumer research Graham Cooke said the RBA will meet only eight times next year, rather than 11 times.

"The RBA was threatening to pull the presents from under the Christmas tree for many homeowners, but falling inflation means they can breathe a quiet sigh of relief."Inflation is the one number the RBA is most heavily influenced by, so this downward trend is great to see," he said.

"Aussies with a home loan can now look forward to two months of certainty, as the RBA does not make a decision in January – and can only make 8 cash rate changes next year."

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After four months of stability at 4.10 per cent, the central bank chose to lift the cash rate to 4.35 per cent in November.

For the average Australian borrower with a $500,000 mortgage, last month's rise means many will be forking out an additional $76 per month, and an extra $1210 since rates began rising in May 2022.

Despite the rise in November, University of New South Wales Associate Professor Evgenia Dechter believed declining inflation pointed to a hold this month.

"Other domestic and global indicators also project a slowdown in the Australian economy," she said.

"However, immigration inflow remains high, creating an upward pressure on prices in the short run."