After the Reserve Bank held the cash rate steady in June and again in August, the question now is whether September brings the next move.

The RBA’s Monetary Policy Board meets next Tuesday, 29 September, with the cash rate currently sitting at 4.35%.

While economists had largely expected the RBA to stay on hold for the rest of the year, the latest inflation figures have shifted expectations. All four major banks are now forecasting the RBA will lift the cash rate at the September meeting.

So, is the pause already over? The consensus says yes. Here’s what’s behind the shift, and what it could mean for your repayments.

Key takeaways

• The RBA held the cash rate steady in June and August, at 4.35%.
• Inflation picked up again in July, driven largely by a sharp rise in fuel prices.
• All four major banks now expect the RBA to lift the cash rate on 29 September.
• ANZ expects a second increase to follow in November.
• Now is a good time for borrowers to review their home loan.

Inflation has taken a turn

Inflation remains the biggest influence on every RBA decision, and the latest figures have caught markets off guard.

The Australian Bureau of Statistics’ July inflation data showed headline inflation climbing back to 3.5%, while the trimmed mean, the RBA’s preferred underlying measure, held steady at 3.6% rather than continuing to ease. Both remain well above the RBA’s 2 to 3% target band.

Much of the jump came from automotive fuel, which rose 7.5% in July alone as global oil prices climbed and fuel excise relief began to unwind. Housing costs, including electricity, also continued to push higher.

That has significantly increased expectations of another rate rise.

Markets that had priced in an extended pause have now largely shifted towards expecting the RBA to lift the cash rate in September.

The RBA has consistently said it remains focused on returning inflation to its 2 to 3% target band and will continue to make decisions based on incoming economic data.

What our experts are saying

On the latest episode of Property Insights, Mark Bouris and economist Stephen Koukoulas discussed just how quickly the outlook has changed.

“We’re confronting some really crazy times on the economy, crazy times for our friends at the Reserve Bank,” Koukoulas said.

Just five or six weeks ago, Koukoulas noted, almost every economist, including the major banks, was ruling out a hike altogether. He puts the shift down to one thing.

“The target is 2.5% annual inflation. So we’re not only a long way from getting to 2.5%, the momentum to get there has stalled,” he said.

Koukoulas also expects the board itself to be divided when it votes next week, rather than presenting a united front.

“I think it’ll be a 5-4 vote to hike. I think there’ll be some debate. It won’t be unanimous,” he said.

What the major banks are predicting

Perhaps the biggest development since the August meeting is that Australia’s major banks have all shifted their call.

Commonwealth Bank, Westpac, NAB and ANZ are now all forecasting a rate rise at the September meeting, reversing months of hold expectations. ANZ has gone a step further, tipping a second increase to follow in November.

Here’s where each of the major banks currently stands:

As of 21 September 2026.

While the exact path from here is still being debated, economists agree it’s heading up rather than down, at least in the near term.

What this means for loan repayments

If the RBA lifts the cash rate next week, borrowers on a variable rate should expect another increase to their minimum home loan repayments.

That will be unwelcome news after what had looked like a genuine pause, with the cash rate on hold for two meetings running.

Borrowers should remember that mortgage rates are already at their highest levels in years, and a further rise will add to cost-of-living pressure for many households already feeling the strain.

Rather than waiting to see what happens, borrowers may benefit from reviewing whether they’re still on a competitive interest rate today.

What can you do if you’re concerned about repayments?

Know your current rate. Check your latest loan statement so you know exactly what interest rate you’re paying.

Compare your options. Lenders continue to compete for quality borrowers, and refinancing may help reduce your repayments even as the cash rate rises.

Speak with someone who compares lenders. A Yellow Brick Road broker can compare your loan across a wide panel of lenders and help you understand whether refinancing could put you in a better position.

With another rate rise on the horizon, now is a good time to make sure your home loan is still working for you.

Start at ybr.com.au/refinance-home-loan, or speak with your local Yellow Brick Road broker today.