Key takeaways
The RBA left the cash rate unchanged at 4.35% in June, with its next decision due on 11 August 2026
Finder's latest RBA Cash Rate Survey found 55% of economists expect at least one further rate increase in 2026
Learn what economists and the major banks are now forecasting, and what the August cash rate decision could mean for your home loan, borrowing power and savings.
Following the Reserve Bank of Australia's (RBA) decision to leave the cash rate unchanged at 4.35% in June, attention has now turned to its next meeting on 11 August 2026.
Borrowers, savers and economists will be watching closely as the RBA continues assessing inflation, labour market conditions and broader economic activity before deciding whether monetary policy needs to remain restrictive or tighten further.
While the cash rate remained unchanged in June, economists remain divided on what could happen next.
Although all four major banks now expect the RBA to hold the cash rate in August following the latest CPI release, some economists continue to believe inflation risks could warrant another increase later this year.
What is the RBA cash rate?
The RBA cash rate is the interest rate set by the Reserve Bank of Australia for overnight loans between banks. It influences the cost of borrowing across the economy, including many variable home loans and savings products.
When the cash rate moves, lenders review their own interest rates. However, each lender makes independent decisions about if, when and how much they adjust.
What are economists predicting for August?
Economists remain closely focused on inflation, labour market conditions, and consumer spending ahead of the August meeting.
Commonwealth Bank, NAB, ANZ and Westpac now expect the RBA to leave the cash rate unchanged at its August meeting following the latest CPI release.
While the major banks are aligned on a hold in August, economists remain divided on whether further rate increases may still be needed later in the year.
More broadly, Finder's latest RBA Cash Rate Survey found that 55% of economists expect at least one further rate increase in 2026.
While many of those economists had previously identified August as the most likely timing, the latest CPI release has since prompted some forecasters to revise their expectations for the upcoming meeting.
Update: Latest CPI figures now available
Since this article was first published, the Australian Bureau of Statistics (ABS) has released the latest Consumer Price Index (CPI) data ahead of the RBA's 11 August decision.
The latest inflation figures are now being assessed by economists and financial markets as they consider what they could mean for the RBA's next move.
Following the latest CPI release, Westpac updated its forecast and now expects the RBA to leave the cash rate unchanged in August, bringing all four major banks into alignment on an August hold.
While the CPI is an important input, the RBA considers a range of economic indicators when making its monetary policy decisions.
Before the latest CPI release, independent economist Saul Eslake said the August decision would depend heavily on the June quarter inflation figures.
"At the moment, I think they'll probably raise rates again at the August meeting, but that depends on the June quarter inflation figures," Eslake said. "If inflation comes in around 3% to 3.25% or lower, I'll probably change my mind."
Although the major banks are now aligned on a hold in August, economists continue to hold differing views about the broader interest rate outlook, reflecting ongoing uncertainty around inflation and the economy.
While economists continue to debate the next move, borrowers are increasingly focused on how different cash rate scenarios could affect their finances and property plans.
What borrowers are seeing right now
Borrowers are continuing to review their budgets, borrowing capacity and loan structures as interest rates remain elevated.
While the Reserve Bank of Australia (RBA) held the cash rate in June, many households are still considering how higher borrowing costs could affect their finances and future property plans.
Aussie Broker Trilocahn Sapkota said many buyers in Darwin remain focused on finding opportunities despite higher interest rates.
"Interest rates are already quite high and will eventually need to come down," Sapkota said. "I don't think they'll come down anytime soon."
Some borrowers are reviewing whether a fixed, variable or split home loan better suits their circumstances, while others are exploring refinancing or checking whether their current rate remains competitive.
Higher interest rates can also reduce borrowing capacity, which may influence how much buyers can borrow and the types of properties they consider.
You might also be interested in: What is a serviceability buffer and how does it affect your home loan?
What an August rate decision could mean for borrowers
If the RBA holds
A second consecutive pause could provide borrowers with more certainty in the short term while the RBA assesses upcoming inflation and economic data.
Eslake said he expects the RBA to remain cautious before considering any future reductions.
"I think they'll wait quite a long time before cutting rates," he said. "They can't afford to make that mistake again."
However, lenders make their own decisions about interest rates. That means home loan rates can still change even if the RBA leaves the cash rate unchanged.
If the RBA hikes again
Another increase could place additional pressure on borrowers already managing higher mortgage repayments and living costs.
Even relatively small changes in interest rates can affect both repayments and borrowing capacity. Higher rates may also lead some buyers to reconsider budgets, property types, or preferred locations.
If the RBA cuts later in 2026
While many economists do not expect a cash rate cut in 2026, some major banks forecast reductions could begin during 2027 if inflation eases sustainably. Any future reductions passed on to borrowers would remain at each lender's discretion.
Wondering whether interest rates could rise again this year and what that might mean for you? Read our guide on whether interest rates will rise and what you can do to prepare.
Some lenders are already cutting variable rates
While the RBA is expected to hold rates in June, a number of lenders are not waiting.
Rate tracking by Canstar shows 11 lenders, including ING, BOQ, Community First and Queensland Country Bank, have reduced at least one variable home loan rate since the May cash rate increase.
According to Canstar, the cuts appear to reflect growing competition for new borrowers rather than a broader shift in lending conditions.
Canstar Data Insights Director Sally Tindall said the moves show competition in the mortgage market is heating up and that "there are discounts to be had for those willing to play ball."
The catch is that these lower rates are generally being offered to new customers. Existing borrowers may not see any change unless they refinance or negotiate directly with their lender.
According to Canstar's database, 40 lenders are currently offering at least one owner-occupier principal-and-interest variable rate below 6%.
Banks may not pass on future RBA moves in full
Even when the RBA adjusts the cash rate, lenders are not required to pass on the full change. Some may move earlier, later, by a smaller amount or by more than the RBA change.
If you’re unsure how any move applies to you, reviewing your loan can bring clarity.
You might also be interested in: Which banks have passed on the RBA’s latest interest rate?
More lenders are competing for borrowers
While the RBA left the cash rate unchanged in June, some lenders have continued adjusting their home loan rates independently.
According to Canstar, 18 lenders have reduced variable home loan rates since the RBA's May decision, with 15 lenders now offering variable rates below 5.90%.
Some lenders have also lowered selected fixed-rate home loans, increasing competition for new borrowers and refinancers.
Source: Canstar; Yahoo Finance Australia
What this means is that home loan rates don't always move in step with the RBA. Even if the cash rate stays the same, lenders may adjust their rates based on funding costs, competition and broader market conditions.
If you haven't reviewed your home loan recently, comparing your current rate with what's available may help you understand whether there are more competitive options for your circumstances.
What it means for savers
Rate decisions don’t just affect borrowers.
If rates rise, savings accounts and term deposits may see improved returns, although not all providers move at the same speed or by the same amount.
If rates hold or fall, savers may see returns stabilise or ease. It can be worth reviewing whether your savings structure still suits your goals.
Balancing debt management and savings strategy becomes increasingly important during periods of rate uncertainty.
Cost of living pressures remain in focus
Higher interest rates can flow through to mortgage repayments, rents and business costs. For many households, that adds to existing cost of living pressures.
Even small rate movements can make a difference. Reviewing your loan structure, repayment strategy and household budget can help you stay prepared.
In some cases, borrowers may also look at strategies like debt consolidation to help manage repayments. This involves combining multiple debts into a single loan, which may reduce overall monthly repayments depending on the structure and interest rate.
You can learn more about how this works in our guide to debt consolidation.
What the next RBA decision could mean for you
While economists debate the next move, it can help to think about what different outcomes could mean for your own plans.
If the RBA… | What you might want to think about |
|---|---|
Raises rates | • Review your borrowing power. Higher rates can reduce how much you can borrow. |
Holds rates | • A pause can be a good time to review your loan and borrowing capacity. |
Cuts rates | • Lower rates could increase borrowing power and reduce repayments. |
If you’re unsure what the next RBA move could mean for your situation, an Aussie Broker can help you review your options and plan your next step.
Tips to prepare for possible rate changes
• Review your current rate and repayment amount
• Check when you last refinanced or negotiated with your lender
• Build or maintain a buffer where possible
• Consider whether fixed, variable or split options suit your situation
• Talk to an Aussie Broker if you’re unsure what’s right for you
With over 1,000 Aussie Brokers across 200+ stores, we can help you understand your options and feel confident about your next step.
Need help reviewing your home loan?
If you’re unsure how a rate hold, hike or future cut could affect you, an Aussie Broker can help you understand your options.
We’ll look at your current rate, loan structure and goals, and help you decide whether refinancing, restructuring or staying put makes sense for your situation.
You can get in touch online, over the phone, or by visiting an Aussie store near you.
Book a free^ chat with an Aussie Broker to review your current loan and explore your options.