All Big Four Banks Now Expect Another RBA Rate Hike. Is Your Mortgage Ready for 4.60%?

For months, the biggest question facing Australian mortgage holders was:

When will interest rates start falling?

That conversation has changed.

All four of Australia's major banks now expect the Reserve Bank of Australia to increase the cash rate again before the end of 2026.

Westpac became the final Big Four bank to change its forecast on 8 September, abandoning its previous expectation that the RBA's next move would eventually be a rate cut.

It now expects a 0.25 percentage-point increase in November, which would take Australia's cash rate from the current 4.35% to 4.60%.

Commonwealth Bank and ANZ also expect the cash rate to reach 4.60% in November.

NAB is more aggressive. It expects the RBA to increase rates to 4.60% at the 29 September decision, and says there is a risk another increase could follow in November if economic activity remains resilient.

That means the debate among Australia's major banks is no longer primarily about whether rates will rise again.

It is increasingly about when.

Where the Big Four Banks Now Stand

NAB has also warned that a further November increase remains possible if activity and inflation remain stronger than expected.

The RBA itself has not committed to another increase.

The current cash rate remains 4.35%, and the next monetary-policy decision is due at 2:30pm AEST on 29 September 2026.

But the change in bank forecasts represents a significant shift in Australia's mortgage outlook.

Why Did Westpac Change Its Mind?

Westpac Chief Economist Luci Ellis said the probability of another increase had risen enough to make a November hike the bank's new base case.

Two factors were particularly important.

The first is the apparent resilience of Australian households.

The second is the scale of investment associated with Australia's rapidly expanding data-centre sector and the electricity infrastructure required to support it.

Westpac believes this investment could provide a larger boost to business investment and economic growth than previously expected.

That's positive for economic activity.

But stronger demand can also make the RBA's inflation problem harder to solve.

Westpac argues that while Australia's housing market is weakening, the drag from falling property prices could be more than offset by broader investment and technology-related spending.

In simple terms:

The economy may be proving harder to slow down than economists expected.

And if demand remains too strong relative to Australia's productive capacity, inflation can remain elevated.

Inflation Is Still the RBA's Main Problem

The RBA's inflation target is 2% to 3% over time.

But the latest annual CPI reading for July is 3.5%.

That is one reason the RBA continues to sound cautious.

When it left the cash rate unchanged at 4.35% in August, the Board said inflation remained too high and noted that underlying inflation pressures were still elevated.

The RBA has already raised the cash rate three times during 2026.

Financial conditions have therefore tightened substantially.

Yet inflation has not returned comfortably to target.

That is why the possibility of another increase remains alive.

Australia's Economy Is Slowing, But Perhaps Not Enough

The June-quarter National Accounts showed Australia's economy grew 0.4% during the quarter and 2.1% over the year.

That is not exceptionally strong growth.

But it was enough to keep questions alive about how much spare capacity actually exists in the economy.

NAB interpreted the June-quarter data as showing that growth had slowed but remained around its trend pace over the previous year. NAB continues to believe that this could justify lifting the cash rate to 4.60% in September.

Westpac has reached a similar destination through a slightly different path.

Its concern is that stronger household incomes and the investment boom surrounding data centres, AI infrastructure, renewable electricity generation and transmission could prevent inflation from falling as quickly as previously expected.

What Would a 4.60% Cash Rate Mean for Mortgage Holders?

The cash rate is not the same thing as your mortgage rate.

But variable mortgage rates tend to be highly sensitive to RBA changes.

If the RBA increases the cash rate by 0.25 percentage points and a lender passes that increase through in full, repayments on variable-rate mortgages would generally rise.

Canstar estimates that for an owner-occupier with a $600,000 mortgage and 25 years remaining, another 0.25 percentage-point increase would add approximately $91 per month to the minimum repayment.

That is roughly:

$1,092 per year

in additional mortgage repayments.

For an $800,000 loan, Canstar estimates the increase at around $122 per month.

For a $1 million mortgage, it would be approximately $152 per month.

And that would come on top of the rate increases borrowers have already absorbed during 2026.

The cumulative impact matters more than one 0.25% hike

A quarter-percentage-point increase can sound relatively small.

But mortgages involve very large balances.

For borrowers who started 2026 with a $600,000 mortgage and 25 years remaining, Canstar estimates the cumulative increase across the year's rate rises could reach around $456 per month if both September and November increases occurred.

That is more than:

$5,400 per year

of additional cash-flow pressure.

This is why borrowers should look at the entire rate cycle rather than one RBA decision in isolation.

NAB Is Even More Hawkish Than the Other Big Four

There is an important detail behind the "all Big Four expect a hike" headline.

They do not all agree on timing.

Westpac, CBA and ANZ currently expect the next increase in November.

NAB expects it sooner.

Following July's stronger inflation result, NAB changed its forecast to a September increase to 4.60%.

It also said the risks were tilted toward an additional increase in November if incoming economic data remained resilient.

If NAB's more aggressive scenario occurred, the cash rate could potentially rise beyond 4.60%.

That is not the consensus forecast today.

But it illustrates how much the interest-rate outlook has changed.

The September RBA Meeting Is Now Much More Important

The next RBA decision is scheduled for 29 September.

Westpac does not expect the RBA to move then.

Its preference for November reflects the availability of additional economic and inflation data before the RBA's 2 to 3 November meeting.

NAB takes the opposite view.

It believes July's inflation numbers already provided sufficient evidence of upside inflation risk to justify an earlier increase.

That creates an unusually important September meeting for mortgage holders.

But borrowers do not necessarily need to wait until then before reviewing their finances.

Your Mortgage Rate Can Change Without the RBA Moving

This is particularly important following our recent discussion about mortgage refinancing.

Lenders do not all price home loans identically.

They compete for customers.

And despite expectations of another RBA increase, lenders have recently been cutting selected variable rates for new customers.

Canstar's tracking showed 35 lenders had reduced variable rates for new borrowers since June, while dozens of lenders were offering at least one variable product below 6%.

That creates an unusual market dynamic.

The RBA may be preparing to raise rates while individual lenders compete by cutting selected mortgage rates.

Both can happen simultaneously.

For borrowers, that means simply waiting for the RBA may not reveal the full picture.

Are You Paying a Loyalty Penalty?

Existing customers and new customers can sometimes receive different pricing.

A lender may advertise a particularly competitive rate to attract new borrowers while an existing borrower remains on an older rate.

That is why homeowners should know their actual current interest rate.

Not approximately.

Not what the loan started at.

The rate being charged today.

If you have not reviewed your mortgage for several years, it may be worth comparing:

your current rate, current lender discount, available refinance rates, annual fees, offset facilities, remaining loan term and total switching costs.

A mortgage review does not automatically mean you should refinance.

It simply allows you to make the decision using current information.

What About Fixed-Rate Borrowers?

Borrowers currently on a fixed rate are generally protected from an immediate RBA increase during the fixed period.

But the important date is when the fixed term expires.

A borrower rolling from an older fixed rate onto current variable or fixed pricing could experience a significant repayment change.

The appropriate strategy may depend on:

the remaining fixed period, current break costs, new fixed-rate offers, variable options and the borrower's future plans.

Anyone nearing the end of a fixed period may therefore want to start reviewing options before the expiry date rather than waiting until the loan automatically converts.

Could the Rate Forecast Change Again?

Absolutely.

An economist's forecast is not an RBA decision.

New information can change the outlook quickly.

That is exactly what happened to Westpac.

It previously believed the RBA's next move would eventually be a cut.

New economic information caused it to reverse that position.

The same could happen again.

Inflation could weaken faster than expected.

Unemployment could rise.

Consumer demand could deteriorate.

Housing prices could fall more sharply.

Or global conditions could change.

Conversely, stronger inflation or economic activity could make further tightening more likely.

That uncertainty is precisely why borrowers should avoid building their household budget around one forecast.

What Can Mortgage Holders Do Now?

Borrowers cannot control the RBA.

But they can control how prepared they are.

A useful mortgage review should answer one central question:

If rates rise again, is my current home loan still the right structure for me?

That means looking at your actual repayments, financial buffer, interest rate, equity position and available alternatives.

For some borrowers, building a larger cash buffer may be the priority.

For others, it may be refinancing.

Some may benefit from renegotiating with their existing lender.

Others may decide that their current mortgage remains competitive and no change is required.

The objective is not to make a decision because economists predict a rate increase.

It is to understand how another increase would affect your finances.

Is Your Mortgage Ready for 4.60%?

The biggest change in this week's financial news is psychological as much as economic.

Australia spent much of the previous rate cycle debating when relief would arrive.

Now:

Westpac expects another hike.

CBA expects another hike.

ANZ expects another hike.

NAB expects another hike and thinks it could happen as early as September.

The consensus could still prove wrong.

But for mortgage holders, it provides a useful stress test.

If the cash rate reaches 4.60%, would your household budget comfortably absorb another increase?

And perhaps more importantly:

Is the mortgage you have today still competitive enough for a higher-rate environment?

Review Your Home Loan Before the Next RBA Move

At Loan & Own Mortgages, we help Australian homeowners, home buyers, investors and self-employed borrowers review their lending options and understand how changes in interest rates could affect their position.

That can include comparing your existing mortgage with current lender options, assessing potential refinancing savings, reviewing loan features and understanding your repayment exposure if rates move again.

You do not have to predict exactly what the RBA will do.

You can prepare for the possibilities.

Speak with Loan & Own Mortgages to review your home loan before the next interest-rate move.

Data Sources

Westpac Economics, 8 September 2026: Westpac changed its RBA forecast and now expects a 25bp November hike to 4.60%, citing more resilient household incomes and stronger spillovers from data-centre investment.

ABC News, 8 September 2026: Westpac became the final Big Four bank to forecast another RBA increase and continues to expect rate cuts beginning in August 2027.

Commonwealth Bank: CBA expects a 25bp increase in November, taking the cash rate to 4.60%, following stronger-than-expected July inflation.

ANZ: ANZ expects a 25bp increase to 4.60% in November following persistent inflation and resilient household spending.

NAB: NAB expects the RBA to increase rates to 4.60% at the September meeting and sees a risk of another increase in November.

Reserve Bank of Australia: Current cash-rate target is 4.35%, with the next monetary-policy decision scheduled for 29 September 2026. Annual CPI inflation was 3.5% in July.

Canstar: A further 25bp increase is estimated to add approximately $91 per month to repayments on a $600,000 owner-occupier mortgage with 25 years remaining, assuming lenders pass the increase through.

This article contains general information only and does not constitute personal financial, credit, investment, tax or legal advice. Interest-rate forecasts may change, and the RBA is not required to follow commercial-bank forecasts. Loan rates, repayments and refinancing suitability depend on individual circumstances and lender assessment.