Home loan watch: when will interest rates come down again? Industry forecasts explained
Key Points
- The RBA left the official cash rate unchanged at its November meeting, citing sticky inflation
-
Headline (3.2%) and underlying (3.0%) inflation are at or above the RBA's 2-3% target band
- The unemployment rate slipped to 4.3% in October after rising to 4.5% in September 2025
- Only two of the Big Four banks expect cuts in 2026, CBA and NAB say no more for this cycle
The Reserve Bank of Australia (RBA) maintains that its number one enemy is inflation. If inflation stays high, so will home loan interest rates. For households experiencing mortgage stress, a cut to the cash rate may see their variable rates reduced – potentially providing some financial relief.
UPDATE: The RBA held the official cash rate at 3.60% on 4 November, 2025. View
When will the RBA cut rates again?
Sticky inflation and the RBA’s repeated decisions to hold the cash rate steady through 2024 defied expectations, forcing many economists to push their rate-cut forecasts further into the future.
However, now that the RBA has cut the cash rate three times in 2025, banks and market commentators have reset their forecasts in order to predict the timing of future rate reductions.
Cash rate forecasts: CommBank, ANZ, NAB & Westpac
The latest Big Four bank predictions for RBA movements in 2025/26 as at 19 November, 2025:
- CommBank – No more cuts this cycle
- ANZ – Cut in February '26
- NAB – No more cuts this cycle
- Westpac – Cut in May '26, and one more in August '26
The figures below offer a quarterly overview of the Big Four banks' long term cash rate outlook:
| Sep 25 | Dec 25 | Mar 26 | Jun 26 | Sep 26 | Dec 26 | |
|---|---|---|---|---|---|---|
| CommBank | 3.60% | 3.60% | 3.60% | 3.60% | 3.60% | 3.60% |
| ANZ | 3.60% | 3.60% | 3.35% | 3.35% | 3.35% | 3.35% |
|
NAB |
3.60% |
3.60% |
3.60% |
3.60% |
3.60% |
3.60% |
| Westpac | 3.60% | 3.60% | 3.60% | 3.35% | 3.10% | 3.10% |
How can homeowners save on loan repayments?
The RBA last cut the cash rate in August and if lenders passed on the 25 basis point rate cut in full, Aussie homeowners could see meaningful savings on their mortgage repayments.
According to Mozo’s latest analysis, the average borrower with a $660,000 loan could save around $100 per month, or $1,195 per year, if their rate dropped from 6.10% p.a. to 5.85% p.a.
Borrowers in New South Wales, Queensland and Victoria are likely to see the most significant differences in terms of annual dollar value savings on their mortgage repayments.
See below for a state-by-state comparison and breakdown of potential borrower savings:
| Potential Mortgage Repayment Savings | |||||
| State | Loan amount | Current monthly repayments | Potential new monthly repayments | Monthly repayment difference | Annual repayment difference |
| Australia | $660,000 | $4,192 | $4,092 | -$100 | -$1,195 |
| NSW | $795,000 | $5,050 | $4,930 | -$120 | -$1,440 |
| VIC | $628,000 | $3,989 | $3,894 | -$95 | -$1,137 |
| QLD | $641,000 | $4,071 | $3,975 | -$97 | -$1,161 |
| SA | $591,000 | $3,754 | $3,665 | -$89 | -$1,070 |
| WA | $594,000 | $3,773 | $3,683 | -$90 | -$1,076 |
| TAS | $487,000 | $3,093 | $3,020 | -$73 | -$882 |
| NT | $488,000 | $3,100 | $3,026 | -$74 | -$884 |
| ACT | $616,000 | $3,913 | $3,820 | -$93 | -$1,115 |
| Source: mozo.com.au Based on 25 year terms, Owner Occupier Principal & Interest. Average Owner-Occupier Variable Housing Rate estimate of 5.85% (using 25bp less than 6.10% as of April 2025 Lenders' Interest Rates, RBA), and $660,000 as the average loan size for owner occupier dwellings (Lending Indicators, ABS, March Quarter 2025). | |||||
If you’re struggling to service your loan, you might consider calling your lender to negotiate your rate or do some additional research to investigate whether refinancing may be a viable option.
The best path for you will depend on your individual financial circumstances.
Compare a range of home loans, listed on the Mozo database, below.