Will the RBA hike the cash rate in December 2022? CBA, ANZ, NAB, and Westpac home loan predictions

By Evlin DuBose · · 4 min read
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Collage of a man walking along a red line, approaching jagged spikes.

2022 has been the year of inflation. From May to November, the Reserve Bank of Australia delivered 275 basis points worth of rate hikes, the consequences of which have been deeply felt by home loan borrowers, especially those with the Big Four banks.

Now, with the year coming to a close, let’s unpack how far we’ve come and where we’re going. What will the RBA decide in its 6 December meeting? And what can we expect from interest rates in 2023?

Effects of interest rate hikes in 2022

Collage of people stacking red blocks.

As the guardian of Australia’s monetary policy, many expect the RBA to play a critical role in managing inflation. The primary tool at its disposal is the official cash rate.

By cutting the cash rate, RBA liquidates the economy and encourages spending. Raising the cash rate, on the other hand, discourages spending.

The era of pandemic stimulus ended when the RBA first hiked the cash rate in May 2022. Since then, lending and deposit interest rates have shot up. 

For context, at the end of March, the average variable home loan rate for owner occupiers (LVR < 80%) in Mozo’s database sat at 3.09% p.a. Now, it’s 5.41% p.a.

The property market has felt the full force of the change, with price falls, capital losses, and reduced borrowing power creating one of the strangest spring selling seasons in recent memory. 

Inflation, however, continues to burn through wallets across the country, crushing real wages under the rising cost of living. 

At least some savings accounts now start with a ‘4’.

Can I ask for a better rate on my savings?

Westpac, CBA, NAB, and ANZ rate predictions for December 2022

Collage of an old banker looking through a telescope at a flag down a winding path.

Some of the leading interest rate predictions this year have come from the Big Four banks, all of which have dutifully passed along the full rate hike every month since May. 

While past months have faced split prediction camps, all four agree that another 25 bp rate hike will come in December (pushing the cash rate up to 3.10%). 

The big banks disagree, however, on whether a December rate hike will be the peak of this tightening cycle, or if there’s more to come next year.

Westpac has led the hawkish pack with steep predictions from the outset. According to the bank’s reasoning, movements to the cash rate affect not only savings accounts and home loans, but the economic mindset. 

If everyone expects everything to go up, Westpac argues businesses could continue passing along cost and wage increases – thus, spending never slows. However, if the RBA sends a clear and resounding message with dramatic rate hikes, it encourages everyone to batten down the hatches instead.

As such, Westpac and ANZ agree that the cash rate will climb another 75 bp into 2023, settling at 3.85% in May. 

Commonwealth Bank leads the dovish quarter: the bank reckons December’s decision will be the last of the cycle, though there is room for the RBA to adjust its course if inflation holds strong in the new year. 

NAB finds the middle ground between the two camps with a 3.60% peak in March 2023.

Cash rate peak predictions from the big banks (28 November 2022)

December 2022February 2023March 2023April 2023May 2023
CBA3.10%----
NAB3.10%3.35%3.60%--
ANZ3.10%3.35%3.60%Nil3.85%
Westpac3.10%3.35%3.60%Nil3.85%

The RBA doesn’t meet in January. Neither ANZ nor Westpac expects a decision in April 2023.

Loan details

Rate change

Repayment change if rates go up

What’s the best way to handle mortgage rate hikes?

Collage of a woman clearing a gap in a pink block.

As late as November 2021, the RBA had been predicting it wouldn’t raise the cash rate above its historic 0.10% low until 2024. Patently, this hasn’t been the case. 

In a statement to a Senate committee, RBA governor Philip Lowe recently apologised to Australian homeowners who jumped into the housing market based on this embarrassingly hollow promise. 

However, Lowe argues rising mortgage costs and a decline in purchasing power are necessary trade-offs to fighting inflation, which will ‘naturally’ come down by 2024. 

In the meantime, rising mortgage rates will remain the nemesis of household budgets. Here are some strategies you can take to keep up with repayments.

  • Budget, budget, budget. Especially with holiday spending coming up, now’s the time to budget your monthly expenses and see where you can give or take. 
  • Pay down your principal to save on interest. Many consumers still have savings from the pandemic. If you can, consider making extra repayments to reduce the interest you have to pay later. 
  • Talk to your lender. They can help strategise how to manage your repayments or, even better, sometimes lower your rate – you might be surprised how much you can negotiate!
  • Go green. Recent research found that greening your home with energy-efficient features could add up to 10% in value and potentially make you eligible for a green home loan (which can come with rewards like a lower interest rate). 
  • Compare home loans. While refinancing can be a pile of paperwork and hoops to jump through, it’s infinitely preferable to suffering under a home loan you can’t afford. Compare home loans on offer to see if you could switch and save somewhere else. Look for features like a low interest rate, offset account, or a redraw facility.

Compare home loans below.

Home loan comparisons on Mozo

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Last updated 27 July 2024 Important disclosures and comparison rate warning*

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  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.38 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.54 % p.a.
    Fixed 2 years
    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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