Are interest rates going up? New forecasts from Westpac, NAB, ANZ, and CommBank

Key Points

  • The Big 4 Banks do not expect any rate rises in 2024. The cash rate has peaked at 4.35%.
  • The RBA may start cutting interest rates less in September to December 2024.
  • The next RBA interest rates announcement is 7 May 2024.
  • A technical recession is possible in 2024, but not looking likely at the moment.
Collage of a man walking a rising graphline on a field of red.

Over the last two years, the home loan market has been rocked by a series of rate hikes thanks the Reserve Bank of Australia (RBA). The central bank has been chasing runaway inflation with tighter monetary policy.

Experts from the Big Four banks agree the dust will settle with the current official cash rate of 4.35%. The RBA has certainly maintained a tightening bias, though it has softened its language considerably.

There is better news, too. As the economy recovers from disruptions, interest rates may come down in 2024, even as early as September.

Let's break down the predictions below.

How high will rates go in 2024? RBA rate hike movements, play by play

Up arrows for interest rates, text:

Any RBA decision to raise official interest rates in 2024 will be strongly data-dependent, since the cash rate is already in deeply restrictive territory.

This means economic indicators such an employment, household spending, and wage growth (AKA "services inflation") will guide all RBA decisions in 2024.

At the moment, there is plenty of evidence that the economy has slowed down and that inflation has begun to moderate. Unemployment has started to uptick while wages growth has picked up the pace. This supports an argument for no rate hikes in 2024, leaving the cash rate at a peak of 4.35%.

Interest rate forecasts for 2024

The RBA held the cash rate at 4.35% in March, which makes the next date the RBA could hike 7 May 2024.

Big Four Bank RBA interest rate forecasts (6 February 2024)

Big BankCash Rate Peak in 2024
Commonwealth Bank4.35% p.a.
ANZ4.35% p.a.
Westpac4.35% p.a.
NAB4.35% p.a.

In the meantime, mortgage stress will continue to rock the housing market. Even if we have seen the last cash rate hike decision, borrowers will keenly await a time when rates come down.

Will there be a rate cut or recession in 2024?

If the economy slows down too much, the RBA may choose to cut the cash rate. This is especially critical if they're trying to ward off a recession. However, with Australian employment still going strong, the alarm bells aren't quite ringing yet. 

What's more, the Big Banks estimate that inflation will ease off in late 2024 and early 2025, potentially incentivising the RBA to relax its iron grip on the cash rate and pass along a series of cuts anyway.

RBA cash rate cut forecasts from Westpac and NAB (February 2024)

Mar 24Jun 24Sep 24Dec 24Mar 25Jun 25
Westpac4.35%4.35%4.10%3.85%3.60%3.35%
NAB4.35%4.35%4.35%4.10%3.85%3.60%
CommBank4.35%4.35%4.10%3.60%3.10%2.85%

NAB predicts further cuts in 2025 and 2026, with the cash rate hitting 3.10% for the first time in over three years by December 2025. 

CBA, Westpac, and NAB predict that interest rates will come down in 2024 at the earliest and 2025 at the latest, potentially bringing the cash rate into neutral territory of around 3%, while ANZ researchers suggest the cuts may be further down the road. Either way, there may be mortgage relief on the horizon.

However, with the cash rate currently resting at 4.35%, home loan borrowers will continue watching the RBA for future moves.

Stressed about mortgage repayments? Time to get proactive

A woman dances against a blue background because she's got her mortgage under control.

An era of rate hikes has its advantages – if you know how to lean into monetary policy – and there are plenty of great strategies you could take for keeping your mortgage within your budget. So roll up your sleeves: it’s time to get proactive. 

If you already have a mortgage:

  • Get an offset account – and fill it up. While more common with variable home loans, an offset account could save you bundles on interest. 
  • Compare interest rates, and if you find something better, refinance. If you’re in a position to refinance, comparing what’s out there could clue you into deals with better rates, features, and support. 
  • Climb aboard the savings train. Home loan rates may be up, but thankfully, so are savings accounts. In fact, according to Peter Marshall, the term deposit war has only just begun. If you’re considering making the switch, you could start by comparing these high interest rate savings options.

If you’re looking to buy property:

  • Let the government help you out. Every state in Australia has first home buyers grants and schemes aimed at improving access and affordability. On a national level, the Labor government has also announced its new Help to Buy scheme.
  • Show lenders you’re a good bet. Lenders aren’t keen on approving applications from risky borrowers, so if you can, take steps to pay off your debt, save for a bigger deposit, and be mindful of your credit history.
  • Walk into the auction with your head held high. High interest rates cool competition at auctions, so sellers may be more willing than you think to privately negotiate a price – and accept lower offers than normal. So if house prices have fallen in your area, the ball is in your court.

How much will $1 million buy in Australia's capitals? We compared the market so you don't have to. Compare low rate home loans in the table below.

Compare low interest home loans - last updated 29 March 2024

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    Get fast 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.

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    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.

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  • OMG Home Loan

    Owner Occupier, Principal & Interest, <60% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.00% p.a.

    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.

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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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