Big banks’ shocking interest rate call: ‘They’ve peaked’

The experts are split on whether the RBA will raise or hold interest rates.

·2-min read
A composite image of RBA governor Philip Lowe and Australian currency to represent interest rates.
The RBA will meet tomorrow to make a decision on interest rates, (Source: Getty / AAP)

Aussie homeowners are waiting cautiously for the Reserve Bank’s (RBA) interest rate decision tomorrow.

And while previous months have been easier to predict, this month the major banks and economists are split on whether Aussies will be paying more interest on their mortgage repayments.

Commonwealth Bank (CBA) is the only Big Four bank to predict a 0.25 per cent hike when the RBA meets tomorrow, but stressed it would be a line-ball call.

Westpac and NAB now believe rates have peaked - meaning they don’t expect another hike anytime soon.

Big four bank’s current cash rate forecasts


Tuesday’s RBA mtg

Cash rate peak

Forecast cuts


+0.25% to 3.85%

3.85%, May 23

4 x 0.25% cuts, end 2023 to 2024


On hold at 3.60%

3.60% March 23

4 x 0.25% cuts in 2024 + 2 x 0.25% cuts in 2025


On hold at 3.60%

3.60% March 23

2 x 0.25% cuts in 2024


On hold at 3.60%

3.85% Aug 23

1 x 0.25% cut Nov 2024 research director Sally Tindall said it was going to be an extremely close call, but the odds were stacking up in favour of a pause.

“There’s not a huge amount in this month’s data that would push the RBA into further action, in favour of buying itself more time to see what impact the 10 previous hikes have had,” Tindall said.

“Front of mind for the RBA is the fact that some households haven’t yet started paying for the February hike, let alone the March one. Households are still catching up to these rate hikes, rather than catching their breath.”

Tindall said a pause over two consecutive months will give the RBA a better indication of how households are holding up.

“That said, people with a mortgage should still plan for a hike on Tuesday. If it doesn’t come next week, it could be only a matter of months away. If it doesn’t come at all, then you’ll have given yourself a bit of extra breathing space and that’s never a bad thing,” she said.

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