RBA Rate Hike Expected in February 2026

After a series of rate cuts throughout 2025, major Australian banks are now forecasting that the Reserve Bank of Australia (RBA) will raise interest rates at its February 2026 meeting. This potential shift could significantly impact homeowners and prospective buyers across the country.

What Are the Banks Predicting?

The Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) have both revised their forecasts to predict a rate hike in February 2026. According to CBA's Head of Australian Economics, Belinda Allen, "The economy has picked up more momentum than expected, and that strength is keeping inflation from easing."

Citi was the first major bank to forecast hikes in 2026, predicting two increases - one in February and one in March. NAB is also calling for an additional hike in May 2026.

If these predictions come true, the cash rate could rise from its current 3.60% to 3.85% or higher by mid-2026.

How Will This Affect Your Home Loan?

If the RBA raises rates and banks pass on the increase in full, variable rate borrowers will see their repayments increase. Here's what a 0.25% rate hike could mean:

What Can You Do to Prepare?

With potential rate rises on the horizon, now is the time to review your mortgage strategy:

1. Review Your Current Rate

Many borrowers are paying more than they need to. Check if your current rate is competitive - if you haven't reviewed your loan in the past 12 months, you could be paying thousands more than necessary.

2. Consider Fixing Your Rate

Fixed rates can provide certainty in uncertain times. However, fixed rates have already started rising in anticipation of RBA moves, so timing is important.

3. Build a Buffer

If you have extra funds, consider putting them into an offset account or making additional repayments. This reduces the principal you're charged interest on and provides a safety net if rates rise.

4. Refinance to a Better Deal

Competition among lenders remains strong. Refinancing to a lower rate now could save you money and provide a buffer against future rate rises.

Track Market Expectations

Want to see what the market is predicting? The ASX RBA Rate Tracker shows real-time probabilities for rate changes based on futures market pricing. It's updated daily and shows what traders expect the RBA to do at upcoming meetings.

RBA Meeting Dates for 2026

The RBA will hold eight board meetings in 2026 to review economic conditions and set interest rates. Key dates to watch:

• 2-3 February 2026 - First meeting of the year (decision 3 Feb, 2:30pm AEDT)
• 31 March - 1 April 2026
• 19-20 May 2026
• 7-8 July 2026

Get Expert Advice

Navigating interest rate changes can be challenging. At JMD Mortgages, we help clients understand their options and find the best mortgage solution for their situation.

Whether you're looking to refinance, fix your rate, or simply want a home loan health check, our team is here to help.