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

The Reserve Bank of Australia (RBA) has delivered an aggressive series of hikes to the cash rate for the last six months, bringing up the average variable rate home loan by more than 2% p.a. Now, official interest rates sit at 2.60%, which the RBA considers ‘neutral’ territory. 

Many economic pundits forecasted hefty hikes into the new year, but the RBA pivoted to a dovish 25 basis point move in October. As a result, many of the Big Four banks predict we’ve now entered a slowdown. 

So how much higher will rates go in 2022? And what will be the RBA’s November decision?

Let’s break down the economic forecasts.

Westpac has been the champion of steep hikes since the RBA began lifting rates in May 2022. In the bank’s hawkish view, runaway inflation can only be combatted with equally swift movements to the cash rate. 

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Until recently, Westpac had been predicting a 3.60% cash rate peak by February 2023. But with the September 2021 - 2022 Consumer Price Index clocking in at a staggering 7.3%, Westpac has revised its timeline by heightening the peak to 3.85% in March 2023.

To hit that target, Westpac has hedged its forecast on 50 bp move in November, followed by smaller 25 bp shifts in December, February, and March. The RBA doesn’t meet in January. 

The other big four banks back another 25 bp rise in November. Commonwealth Bank (CBA) and NAB come as the most cautious, predicting the era of rate hikes will end at 3.10% in December.

Cash rate peak predictions from the big banks - 27 October 2022

ANZ Research announced on Twitter that evidence strongly supports 25 bp rises in November and December, revising its final cash rate to 3.85% in May 2023. 

Unfortunately, there’s little chance of a rate cut or no change to the cash rate in November, but borrowers can still prepare for the rising rates – it’s all about tightening the belt and getting clever with your finances.

Until inflation comes under control, rate rises will be the norm – and all that they entail.

RBA decisions have already dragged down housing growth across Australia, with price drops reported in nearly 80% of property markets. With sellers past the profitable peak and buyers limited in their borrowing capacity, navigating the falling market has become key to making the most of the moment. 

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But while capital growth slows, other banking products like term deposits and high-interest savings accounts have ballooned with attractive rates. If you can afford to park some emergency savings, now is an excellent time to compare options to see if you’re getting the best bang for your buck.

Keep a finger on the property pulse with our home loan news hub. Compare low-interest home loan offers below.