Westpac has changed its cash rate prediction. After previously expecting the RBA to leave the cash rate unchanged for the rest of 2026, Westpac now expects a 25 basis point hike in November, taking the cash rate to 4.60%.
That puts Westpac in line with the other major banks on the direction of rates. NAB expects the RBA to move as early as September, while CBA and ANZ are also forecasting a 25 basis point hike in November.
So while the banks disagree on when the next hike will happen, they now agree on something more important: another rate rise is possible before the end of the year.
For borrowers who had started to assume rates were at or near their peak, that's a reason to take another look at the numbers.
Why did Westpac change its forecast?
Westpac says the economic outlook has shifted enough to make another hike more likely. Australian households have proved more resilient than expected, with stronger household incomes supporting spending.
Westpac also expects the boom in data-centre investment and related infrastructure to provide a larger boost to economic activity than it had previously forecast. That stronger activity could make it harder for inflation to fall quickly enough. Currently, it is forecasting one more 25 basis point increase, followed by three 25 basis point cuts beginning in August 2027.
September or November?
This is where the major banks differ.
NAB expects a September hike, which would take the cash rate to 4.60%.
CBA, ANZ and Westpac expect a November hike.
The RBA's next scheduled decision is on 29 September, so NAB's forecast puts the next move just weeks away. The other three major banks are giving the RBA more time to assess the data before moving.
The disagreement over timing doesn't change the bigger shift in the outlook. A few weeks ago, Westpac was the major bank still expecting no further increase in 2026. It has now shifted sides, and expecting another hike.
What does another 0.25% mean for mortgage holders?
If the RBA raises the cash rate by 0.25 percentage points and your lender passes the full increase on to your variable mortgage, your interest rate could rise by a similar amount.
The effect on your repayment will depend on your loan balance, current interest rate and remaining loan term.
For a borrower with a $600,000 principal-and-interest mortgage and 25 years remaining, a 0.25 percentage point increase would add roughly $90 a month to the required repayment, depending on the starting rate.
The bigger question is whether your mortgage can comfortably absorb another increase.
You don't need to wait for the RBA
A possible rate hike is a reason to check your mortgage now, not necessarily a reason to panic about November.
Start with the rate you're actually paying.
If you've had the same loan for several years, compare your current rate with the rates available today for a similar loan. If there's a meaningful gap, ask your lender whether it can offer you a better rate.
Then run the numbers on another 0.25 percentage point increase. Knowing what it would add to your repayment gives you a much clearer picture of the impact than simply watching the cash rate headline.
And remember, the RBA isn't the only thing that can change your mortgage. A fixed rate can expire, an introductory discount can end, and a lender can change a variable rate independently of the RBA.
That's why checking your home loan shouldn't only happen when the RBA makes a decision.
With Bheja, you can connect your home loan and use the Health Check to monitor it over time, so you can spot changes to your rate or loan and decide when it may be worth negotiating, comparing or refinancing.
