Since February, Australia's four major banks have rarely agreed on where the cash rate was heading next. That changed in the past two weeks. CBA, ANZ, NAB, and Westpac are now all forecasting a hold at the June 16 meeting — the first unanimous call in 2026. But unanimous doesn't mean the same thing for all four. CBA and ANZ see June as the end of the tightening cycle. NAB sees one more hike coming in August. Westpac sees two more — August and September — before the cycle peaks at 4.85%. A June hold, in other words, is a pause rather than an ending for most of the market. Here's what changed to produce this consensus, what it means for where rates are heading, and what borrowers with two weeks left should actually do.
What's Changed Since May
When we published our April Labour Force Survey analysis on 25 May, NAB still had a June hike flagged as a live possibility. That has since been revised. NAB now expects the RBA to hold in June and deliver one final hike in August instead, taking the cash rate to 4.60%.
Westpac's position has also been clarified. Their forecast — two more 25 basis point hikes following June, pushing the cash rate to 4.85% — is unchanged, but they now firmly place those hikes in August and September rather than starting in June.
The result is the first unanimous June hold call from all four major banks in this cycle:
Major Bank Forecasts — June 16 and Beyond
| Bank | June 16 forecast | Next expected move | Peak rate |
|---|---|---|---|
| CBA | Hold at 4.35% | None — cycle peak | 4.35% |
| ANZ | Hold at 4.35% | None — cycle peak | 4.35% |
| NAB | Hold at 4.35% | +0.25% August | 4.60% |
| Westpac | Hold at 4.35% | +0.25% August, +0.25% September | 4.85% |
Among the broader economist community, a Reuters survey of 31 economists found 18 — just over half — forecast the RBA would hold at 4.35% through the rest of 2026. More than one-third still tip at least one more hike, with rates reaching 4.60% or higher by September.
Why June Is Almost Certainly a Hold
Four factors have combined to make a June pause the clear base case:
The Four Reasons for a June Hold
- The labour market is cooling. April unemployment rose to 4.5% — above the RBA's own NAIRU estimate of 4.0–4.25% for the first time since mid-2024. Employment fell by 18,600 in seasonally adjusted terms. The RBA's inflation fight relies partly on cooling demand, and the labour market is now showing that cooling clearly.
- Wage growth is below the danger threshold. The March quarter Wage Price Index came in at 3.3% annual — below the approximately 3.5% level the RBA has indicated would add materially to its inflation concerns. With wages moderating, the risk of a wage-price spiral has reduced.
- The April CPI gave the RBA room to pause. The April monthly CPI, released by the ABS on 28 May, showed headline inflation falling to 4.2% — the first easing from the 4.6% March peak. The trimmed mean ticked up slightly to 3.4% from 3.3%, confirming underlying inflation remains sticky, but the headline fall removes immediate pressure for a fourth consecutive hike. The result was mixed enough that it neither forced the RBA's hand nor closed the door on future tightening — precisely the kind of signal the Board said it was watching for. The economic teams of all four major banks specifically cited the April CPI result when revising their June forecasts to hold.
- The RBA has said it wants to assess the impact of three hikes. At the May media conference, Governor Bullock signalled the Board wants time to observe how the three 2026 hikes are flowing through to household spending before deciding whether more tightening is needed. The June quarter CPI — the next major inflation data point — won't be available until late July. On current readings, a pause is the defensible call.
Why the Cycle Isn't Necessarily Over — The Middle East Factor
What makes this cycle unusual is the external shock running alongside the domestic picture. The conflict in the Middle East — specifically the disruption to the Strait of Hormuz, through which approximately 20% of global petroleum liquids flowed in 2024 — has added an inflation driver the RBA cannot control with interest rates.
The Strait was essentially closed for around eight weeks. Traffic has recovered only slowly. Fuel prices have risen sharply, and the RBA's own May Statement on Monetary Policy flagged that the pass-through of higher fuel and energy costs into broader prices has been faster than expected. The RBA's baseline forecast is now for headline inflation to peak at 4.8% in the June quarter 2026.
This is why Westpac and NAB remain hawkish even while forecasting a June pause. Their argument: the oil shock has kept inflation elevated for longer than the domestic data alone would justify, and the RBA will need to do more in the second half of the year once the June quarter CPI confirms the pass-through.
CBA and ANZ take the opposite view: the labour market and wage data are softening, the RBA has already tightened significantly, and the fuel shock is temporary rather than structural. On their numbers, 4.35% is enough. The mixed April CPI — headline falling but trimmed mean still sticky — fits both narratives, which is partly why the four-way split on the peak rate remains unresolved.
What This Means for Your Mortgage
At 4.35%, a $600,000 loan on principal and interest over 25 years costs approximately $3,350/month — approximately $314/month more than at the start of 2026 when the cash rate was 3.60%.
Repayment Impact at Different Cash Rates ($600k loan, 25-year P&I)
| Cash rate | Typical variable rate* | Monthly repayment |
|---|---|---|
| 3.60% (Jan 2026) | 5.85% | $3,036 |
| 4.10% (pre-May hike) | 6.35% | $3,175 |
| 4.35% (current) | 6.60% | $3,350 |
| 4.60% (NAB peak) | 6.85% | $3,530 |
| 4.85% (Westpac peak) | 7.10% | $3,715 |
*Typical variable rate shown as an approximation — actual rates vary by lender, loan type, and LVR.
A June hold provides immediate relief — no rate change means no repayment increase this month. But if NAB's August hike or Westpac's August and September hikes materialise, repayments will rise further by year end.
What to Do in the Next Two Weeks
With the June 16 decision 14 days away and widely expected to be a hold, the relevant question isn't whether rates rise on June 16. It's whether they rise in August. Here's what to do now:
- Review your rate before the decision, not after. Lenders are still competing for new business and refinance volumes are active. The gap between a loyalty variable rate and a competitive new-customer rate can be 0.30–0.60% at some lenders. A rate review costs nothing and doesn't lock you in — but it gives you a clear picture of where you stand before the next potential hike.
- Model your repayments at 4.60% and 4.85%. If NAB is right, your monthly repayment on a $600,000 loan rises to approximately $3,530 by August. If Westpac is right, it rises to $3,715 by October. Running those numbers now — and checking whether your budget absorbs them — is more useful than waiting to see what happens.
- Get serious about fixing a portion if repayment certainty matters. Fixed rates from the major banks are currently in the 6.29–6.50% range for 1–2 year terms (as at early June 2026), approaching parity with variable rates. If the difference between absorbing August and September hikes and not absorbing them is meaningful to your budget, locking in a portion now hedges that risk. Discuss the current spread with a broker before committing — the right split depends on your loan size, remaining term, and cash flow position.
- Don't assume a June hold is permission to borrow more. Borrowing capacity is calculated at current rates plus a 3% serviceability buffer — so at 4.35%, lenders are stress-testing at 7.35%. That buffer is there precisely for the scenario where two more hikes arrive. Don't use a likely June hold as a reason to push your borrowing to the limit.
Written by Amit Narang, Mortgage Broker | Credit Representative 558902 of Outsource Financial Pty Ltd (ACL 384324)
Sources: ABS, Monthly CPI Indicator, April 2026 (released 28 May 2026); CBA, "RBA has room to pause after May rate hike"; NAB, updated RBA rate forecast June 2026; Westpac IQ, "Revised RBA rates view: two extra hikes, 4.85% peak, later reversal"; Aussie, "What experts predict for the RBA's June 2026 interest rate decision"; Reuters, survey of 31 economists on RBA cash rate outlook, June 2026; RBA, Statement on Monetary Policy May 2026; RBA, Media conference 5 May 2026; ABS, Labour Force Survey April 2026; ABS, Wage Price Index March quarter 2026.
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