Will the RBA hike the cash rate in December 2023? CBA, ANZ, NAB, and Westpac home loan predictions

Woman thinking about how high interest rates will go from the RBA December 2023 meeting.

Mortgage lenders have wasted little time in passing along the November Reserve Bank rate hike – a hike that broke a five-month dry spell for home loans

The call to raise interest rates came from higher-than-expected inflation for the October Quarter. RBA governor Michele Bullock has also struck a hawkish tone in her recent speeches, highlighting how much householding spending is starting to play into sticky inflation

Indeed, if Black Friday and Christmas shopping heat up too much, consumer demand could prove too hot again to hold in December. 

That being said, the monthly CPI released this week contained no major upside surprises. In fact, we might be on the downward trend. While this doesn’t mean the RBA can’t move next year – and push the rate cycle higher – there’s a strong likelihood that cash rate hikes are done for 2023. 

So how confident can Aussies be about a rate hold in December? Let’s break down interest rate forecasts from the Big Banks for the RBA’s 5 December meeting.

Will the RBA hike interest rates in December?

Woman looking at a rising bar graph indicating interest rate hikes from the RBA.

Australians will most likely have a happy holiday season this year. Economists have placed a low chance of a rate hike in December, despite an expected uptick in holiday spending. 

Mozo interest rates and banking expert Peter Marshall explains the RBA will still want to see how the November rate hike unfolds before dealing the economy another one. 

“They’re well-aware that it takes a while for hikes to flow through to people and get them to adjust their financials,” explains Marshall.

“So, given that [this week’s] CPI figure shows that inflation is going down, I think that the RBA will not want to play Grinch and hit the economy with an interest rate rise.”

The economy continues to show signs of a slow down – including a slight increase in unemployment – so hitting things with another rate rise too soon could risk damaging things.

“So it will be very unlikely that they will want to risk crashing the economy with another rate rise, which I think would be a bit brutal coming on the heels of the November rate rise,” says Marshall.

Commonwealth Bank, Westpac, NAB, and ANZ rate predictions for December 2023

None of the Big Four Banks (at the time of writing) believe there will be a rate rise in December, so good news for borrowers still dealing with the fallout of November. 

Big Four Bank cash rate predictions for December 2023

Cash rate in December
ANZ
4.35%
CBA
4.35%
Westpac
4.35%
NAB
4.35%

“The RBA is still ready to raise rates further if it sees further upside surprises on inflation,” explains Westpac chief economist Luci Ellis. “It has no tolerance for more delays in the return to the inflation target. So February [2024] is still live, but we don’t see them moving in December.”

That February meeting might be a crucial one to watch. NAB has also pencilled in a potential rate rise for the RBA’s first 2024 meeting (the central bank doesn’t meet in January). 

It makes sense: waiting until the holiday season is over gives the RBA time to evaluate how the November rate hike and holiday spending affected inflation. So while February remains ‘live’ indeed, Marshall explains it’s not set in stone. 

“So, if [spending] goes through the roof, then perhaps the RBA will say ‘Oh, we need to move again.’ But it does seem unlikely,” explains Marshall. 

“Consumer spending has started to come down a little in the last couple of months, based on the latest data. So, it seems unlikely that that will change all of a sudden.”

Indeed, CommBank maintains a base case that rates have peaked at 4.35%. Unless inflation does something silly between now and then, homeowners can focus on what’s in front of them. 

Loan details

Rate change

Repayment change if rates go up

When will interest rates come down?

Interest rates will likely come down this time next year, according to the timelines laid out by Westpac and NAB. NAB will have interest rates coming down from a height of 4.60% in December 2024 (indicating a February rate hike), while Westpac has them coming down from their current height of 4.35% as early as September 2024.

When interest rates will come down (NAB and Westpac) – December 2023

March 24
Jun 24
Sep 24
Dec 24
Mar 25
Jun 25
NAB
4.60%
4.60%
4.60%
4.35%
4.10%
3.85%
Westpac
4.35%
4.35%
4.10%
3.85%
3.60%
3.35%

How has the November RBA rate hike affect home loans?

Most home loan lenders Mozo tracks have passed along the rate rise in full to customers. Before November, the average home loan variable interest rate in the Mozo database clocked in at 6.61% for owner-occupiers – largely unchanged since July. Now, the average is 6.82%, and it’s still rising.

Some lenders have exceeded November’s rise with jumps between 0.30% - 0.45%. This could easily mean an extra $100 on a borrower’s monthly repayments. Even fixed rates have scrambled up again as lenders readjust their understanding of the rate environment. 

So what options do Australians have to save money on their dream home?

  • Look for cheaper properties. Unfortunately, one of the easiest ways to save on your monthly repayments is to reduce the size of your home loan principal. The amortised loan amount forms the bulk of any P&I mortgage repayment, so looking further afield, downsizing, or getting a ‘starter home’ with a flat can literally pay off later. 
  • Compare interest rates. Not every lender has ratcheted rates to outrageous heights. There are still some in the Mozo database with rates under 6%. If you’re in a position to refinance and struggle with your current loan, it’s worth considering. It could even be as simple as calling your lender to ask for a better rate. 
  • Take advantage of interest-saving features. Many current borrowers have done the hard yards of reducing their spending, but have you chucked your savings into an offset account, or made extra repayments? Look into what features your home loan has to save interest.

Compare low-rate home loans below. For award-winning picks from 2023, check out our best home loans hub.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 27 July 2024 Important disclosures and comparison rate warning*
  • 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.

image of houses

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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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