Rates on hold but outlook shifts
Borrowers hoping for more cuts next year may need to adjust expectations after a run of higher-than-expected inflation.
The Reserve Bank of Australia (RBA) kept the cash rate at 3.60% in December, but inflation has climbed to 3.8% after four consecutive monthly increases. If inflation remains above the 2–3% target band in 2026, the RBA is unlikely to cut rates – and some economists warn the next move could even be up.
Speaking after the decision, RBA governor Michele Bullock said: “I don’t think there are interest rate cuts on the horizon for the foreseeable future.”
Economist Warren Hogan went further, calling on the RBA to start hiking rates from the first quarter of 2026.
How this affects your loan in 2026
- Coming off a fixed rate – Your repayments may jump. Reviewing your loan now can help you plan ahead and avoid pressure later.
- On a variable rate – Banks can change pricing independently of the RBA. A quick comparison may uncover a sharper rate or a more stable structure.
- Planning ahead – The next six months will be important as lenders adjust to shifting inflation expectations and new lending rules. Being proactive can help you stay in control of your repayments.
If you’d like clarity on how the rate outlook affects you, I can review your loan and show you your options for the year ahead.
If you’d like clarity on how the rate outlook affects you, I can review your loan and show you your options for the year ahead.
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