Will The RBA Hold On 11 August 2026?

Australia’s latest inflation figures have made another interest rate rise on 11 August 2026 much less likely.

Annual headline inflation eased from 4.0% to 3.8% in June, while trimmed mean inflation, the Reserve Bank of Australia’s preferred measure of underlying inflation, remained at 3.6%.

Both figures were below the RBA’s May forecasts. This gives the RBA more room to leave the cash rate unchanged at 4.35% while it assesses how the three rate increases delivered earlier in 2026 are affecting households and the wider economy.

However, inflation remains above the RBA’s 2–3% target range. Prices for services, rents, electricity and new-home construction are still rising quickly.

The most likely outcome is therefore not a rate cut. It is a hawkish hold: the cash rate stays unchanged in August, but the RBA warns that another increase remains possible if domestic inflation does not continue to ease.

Home Loan Experts’ August Interest Rate Prediction

Based on the June inflation result, recent RBA statements and current economic forecasts, our assessment is:

• 85–90% probability: The cash rate remains at 4.35%
• 10–15% probability: The RBA raises the cash rate by 0.25 percentage points
• Very unlikely: The RBA cuts the cash rate in August

Shortly after the inflation figures were released, market pricing implied only about a 3% probability of an August increase, down from approximately 19% immediately before the release. Market expectations can move quickly and do not determine the RBA’s decision.

Our view: An August increase now appears unlikely, but the RBA is not ready to declare that interest rates have peaked.

These percentages are Home Loan Experts’ editorial assessment, not official RBA forecasts or a guarantee of the Board’s decision.

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Your Cash Rate Questions Answered

Will mortgage repayments fall if the RBA holds?

No. A hold means the cash rate remains unchanged. Variable mortgage rates and repayments do not automatically fall.

What is the benefit of a hold?

Borrowers may avoid another immediate cash-rate-driven increase in their repayments.

Does a hold increase borrowing capacity?

Not automatically. Lenders can maintain their existing assessment rates, buffers and lending policies.

Should borrowers wait for an RBA cut before refinancing?

Not necessarily. Someone paying an uncompetitive rate could spend months waiting for a cut that may not arrive soon.

When is the next RBA interest rate decision?

The decision is scheduled for 2.30pm AEST on Tuesday, 11 August 2026. The RBA will also publish an updated Statement on Monetary Policy.

What Changed In The Latest Inflation Figures?

The latest Consumer Price Index result was lower than both market expectations and the RBA’s forecasts.

The RBA had expected headline inflation to reach 4.8% in the June quarter as higher fuel and raw-material costs flowed through to consumer prices. It expected trimmed mean inflation to reach 3.8%.

The important development is not simply that inflation eased.

It is that inflation was weaker than the RBA had already allowed for in its forecasts.

This suggests that the initial effects of higher energy costs and the Middle East conflict have been less severe than the RBA feared.

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Why Is An August Rate Rise Now Less Likely?

There are five main reasons.

1. Inflation Was Below The RBA’s Forecasts

The RBA’s May forecasts had allowed for significantly higher headline inflation and a rise in underlying inflation.

Instead, headline inflation was a full percentage point below forecast, while trimmed mean inflation was 0.2 percentage points lower.

A central bank is more likely to increase rates when inflation is stronger than it expected. A downside surprise gives it more reason to wait.

2. Previous Rate Increases Are Still Flowing Through The Economy

The RBA increased the cash rate three times in the first half of 2026, lifting it by a combined 0.75 percentage points.

In June, the Board left the cash rate at 4.35% so it could assess how those increases were affecting economic activity. It noted signs that consumer spending was slowing and housing-market momentum had shifted.

Home loan rate changes do not affect every borrower immediately. Some borrowers are on fixed rates, while others experience higher repayments at different points in their billing cycles.

That means the full effect of earlier increases may still be working through household budgets.

3. Household Spending Is Slowing

Higher mortgage repayments, cost-of-living pressures and weaker confidence are reducing the amount some households can spend.

Governor Michele Bullock said on 28 July that the RBA was seeing consumption slow and that the housing market had weakened by more than expected in its May forecasts.

Slower spending can reduce the ability of businesses to continue raising prices.

4. The Labour Market Has Been Softer Than Expected

Westpac noted that both unemployment and labour-force participation were higher in the June quarter than the RBA had forecast.

A softer labour market does not remove inflation risks, but it reduces the urgency for another immediate increase.

5. The Energy Price Shock Has Been Less Severe Than Feared

Fuel prices fell 10.9% in June, following a sharp decline in May.

The temporary fuel excise reduction contributed to the fall, and the remaining reduction is due to end on 2 August. This means fuel could begin adding to inflation again in the coming months, but the immediate pass-through from the earlier energy shock has been more limited than expected.

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Why Will The RBA Not Declare Victory Over Inflation?

The overall inflation result was encouraging, but some of the underlying details remain uncomfortable.

The improvement was concentrated partly in volatile or internationally influenced prices, including fuel. Inflation generated within the Australian economy remains higher.

Domestic Inflation Is Still Elevated

Non-tradable inflation increased to 4.9% in the year to June. Non-tradable prices generally reflect domestic services and locally supplied goods, making them an important indicator of inflation pressure inside the Australian economy.

Services inflation was 4.0%, while rents rose 3.6% over the year. These costs can be slower to reverse because they are affected by wages, productivity, housing shortages and business operating expenses.

New Home Construction Costs Are Rising

Annual inflation for new dwellings reached 5.8%, its highest level in almost three years.

Builders have continued passing on higher labour and material costs. This matters not only for inflation but also for people applying for construction loans, as rising costs can increase the risk of contract variations, budget shortfalls and valuation issues.

Electricity Prices Remain High

Electricity prices were 22.4% higher than a year earlier, largely because previous government rebates had ended. Some of this annual increase may reduce as the effect of the rebates rolling off moves out of the calculation.

Underlying Inflation Remains Above Target

Trimmed mean inflation at 3.6% is still above the upper end of the RBA’s 2–3% target range.

That makes an August rate cut highly unlikely and gives the RBA a reason to retain the option of another increase.

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What Does A “Hawkish Hold” Mean?

A hawkish hold means the RBA keeps the cash rate unchanged but continues to signal concern about inflation.

The RBA could say that:

• Inflation remains too high
• Domestic price pressures remain persistent
• Previous increases need more time to affect demand
• Future decisions will depend on incoming data
• The Board is prepared to raise rates again if necessary

This differs from a dovish hold, in which the central bank begins signalling that the next likely move could be a rate cut.

Westpac expects the RBA’s August language to remain hawkish, even though it no longer expects an increase at that meeting.

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What Is Westpac Predicting?

Before the June inflation figures were released, Westpac expected the RBA to raise the cash rate in August.

Westpac changed that forecast on 29 July.

It now expects:

• The RBA to hold the cash rate in August
• No further rate increases during 2026 as its base case
• A possible November increase if inflation rises again in the September quarter
• The eventual rate-cutting cycle to begin around August 2027

Westpac said the downside inflation surprise removed the case for an August increase. It also noted that market-services and housing-related inflation were below its expectations.

This does not mean Westpac believes the inflation problem has disappeared. Its expectation is for the RBA to hold while maintaining a clear warning that rates could rise again.

What Are Other Major Banks Predicting?

Bank forecasts can change quickly as new economic data becomes available. The dates below are important because some forecasts were published before the latest inflation figures.

ANZ had forecast trimmed mean inflation of 3.7%, slightly above the actual result of 3.6%. Its stated position before the release was that lower-than-expected inflation and slowing activity would lead to an August hold.

Commonwealth Bank’s published view after the June RBA meeting was that rates would remain unchanged into 2027, with May 2027 identified as a possible time for the next move.

NAB’s forecast predates the softer-than-expected June-quarter inflation result. While NAB has not yet published a revised post-CPI rate call, the new figures are broadly consistent with its existing view that the RBA has room to remain on hold.

Forecasts that have not been updated after the June inflation result should not be treated as current unless their publication date is checked.

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What Is The RBA Likely To Say On 11 August?

The August Statement on Monetary Policy may be just as important as the cash rate decision.

Home Loan Experts expects the RBA to:

Keep The Cash Rate At 4.35%

The softer inflation result gives the Board a strong reason to wait and assess the impact of its previous increases.

Lower Its Near-Term Headline-Inflation Forecast

The RBA’s May forecast had headline inflation reaching 4.8%, compared with the actual result of 3.8%.

A meaningful downward revision is therefore likely.

Make A Smaller Change To Underlying Inflation

Trimmed mean inflation was only 0.2 percentage points below the RBA’s forecast.

Domestic inflation remains elevated, so the underlying outlook may be revised by less than the headline forecast.

Acknowledge That Demand Is Slowing

The RBA has already recognised signs of weaker household spending and slower housing activity.

Retain A Tightening Bias

The Board is unlikely to rule out another rate increase. It may repeat that monetary policy will respond if inflation proves more persistent than expected.

Avoid Signalling Near-Term Cuts

Underlying inflation, services inflation and non-tradable inflation remain too high for the RBA to indicate that rate cuts are imminent.

What Would An RBA Hold Mean For Mortgage Borrowers?

An August hold would be a reprieve, not immediate repayment relief.

Your Variable Repayments Would Not Automatically Fall

When the RBA leaves the cash rate unchanged, lenders are not required to reduce their variable home-loan rates.

Your repayment would generally remain the same unless:

• Your lender changes its rate independently
• You negotiate a pricing reduction
• You switch to a different loan
• Your loan structure or repayment arrangement changes

The immediate benefit is that borrowers may avoid another cash rate-driven increase.

This is an illustrative example only. It assumes monthly principal-and-interest repayments, no fees and no changes to the loan balance or term.

Use our Home Loan Repayment Calculator to estimate the potential effect on your own loan.

Buyers May Get More Certainty, Not More Borrowing Power

An August hold would reduce the immediate risk of another rate-driven fall in borrowing capacity.

However, it would not automatically:

• Increase your maximum loan amount
• Reduce a lender’s serviceability buffer
• Change an existing pre-approval
• Make an unaffordable property affordable
• Cause lenders to relax their credit policies

Lenders assess borrowers using rates above the actual loan rate to test whether repayments remain affordable if rates rise.

Even if the RBA holds, buyers should avoid treating their maximum indicated borrowing capacity as their target budget.

Existing Pre-Approvals May Face Less Immediate Rate Risk

A hold reduces the chance that lenders will increase variable rates and assessment rates immediately after the August meeting.

That may provide more short-term stability for borrowers who already have pre-approval.

However, pre-approval is still conditional. Changes to income, expenses, debts, the chosen property, lender policy or market valuations can affect the final decision.

Refinancers Should Not Automatically Wait For A Rate Cut

A common response to improving inflation is to wait for the RBA to cut rates.

That may not be the best approach if your current mortgage rate is already uncompetitive.

For example, waiting another 12 months for a possible cash rate cut could cost more than reviewing your loan now, particularly if:

• Your lender has not applied a competitive discount
• Your loan-to-value ratio has improved
• Your fixed-rate period has ended
• Your circumstances now qualify you for a better product
• Your loan lacks useful features such as an offset account

A refinance should still be assessed carefully. Potential interest savings need to be compared with discharge costs, application fees, valuation costs and the effect of extending the loan term.

Use our Refinance Calculator to compare potential savings and costs.

Fixed Rates Could Move Before The Cash Rate

Fixed mortgage rates are influenced by more than the current cash rate.

They can also respond to:

• Wholesale funding costs
• Bond-market movements
• Expectations about future RBA decisions
• Competition between lenders
• A lender’s funding and growth strategy

Softer inflation may encourage some lenders to reduce fixed rates or offer stronger new-customer discounts before the RBA cuts the cash rate.

That does not mean all lenders will move at the same time or by the same amount.

Savers May Not Receive Another Increase Either

An RBA hold also affects people with savings accounts and term deposits.

Banks would face less pressure to lift deposit rates in response to another cash rate increase. However, individual savings rates could still move because of competition and funding requirements.

Construction Borrowers Still Face Cost Pressure

For people building a home, the interest rate decision is only one part of the risk.

New-dwelling inflation of 5.8% shows that residential construction costs remain elevated.

Construction borrowers should also consider:

• Builder variations
• Cost overruns
• Delays
• Progress-payment requirements
• Valuation shortfalls
• Interest charged during construction
• The size of their contingency fund

An RBA hold may prevent an immediate cash rate increase, but it does not reduce the contract price or protect against construction-cost changes.

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Should You Wait For Interest Rates To Fall Before Buying?

An interest rate prediction should not be the only reason to buy now or wait.

For most buyers, the more useful questions are:

• Can you comfortably afford the repayments at today’s rates?
• Could your budget handle another 0.25-percentage-point increase?
• Will you have savings left after the deposit and purchasing costs?
• Is the property suitable for your longer-term needs?
• Are you relying on future rate cuts to make the loan affordable?
• How stable are your income and employment?
• Does the loan provide the features you need?

Waiting for lower rates can have trade-offs. Property prices, rent, competition and lending policy may also change while you wait.

A mortgage broker can model different repayment and interest rate scenarios, but cannot guarantee what the RBA or property market will do.

Should You Wait Before Refinancing?

Waiting may make sense when the cost of refinancing outweighs the available savings.

It may not make sense when:

• Your current interest rate is materially above comparable offers
• Your lender has rejected a reasonable pricing request
• You need loan features your current product does not provide
• Your fixed period is ending
• Your financial position has improved
• Your loan structure no longer suits your goals

The decision should be based on the available options now, not only on a forecast about future rates.

What Could Still Cause The RBA To Raise Rates?

A later increase remains possible if the inflation outlook worsens.

The main risks include:

• Services inflation remaining elevated
• September-quarter inflation exceeding expectations
• Stronger household spending
• Wage growth continuing without an improvement in productivity
• Housing activity recovering faster than expected
• A renewed increase in global energy prices
• Fuel costs rising after the excise reduction ends
• Inflation expectations becoming less stable

Westpac has specifically identified November as a possible risk if inflation strengthens again in the September quarter, although this is not its base-case forecast.

What Should Home Loan Borrowers Do Now?

Borrowers do not need to make a major loan decision solely because an RBA meeting is approaching.

However, this can be a useful time to review:

• Your current interest rate
• Your monthly repayment
• The amount held in your offset account
• Whether your lender will provide a pricing reduction
• The cost and potential benefit of refinancing
• Your ability to manage another rate increase
• Whether your fixed rate is approaching expiry
• Whether your existing loan still supports your goals

An RBA hold may reduce one immediate risk. It does not necessarily mean your existing home loan is competitive.

Review Your Home Loan Before The RBA Decision

A likely August hold could provide borrowers with more short-term certainty, but it does not automatically reduce repayments or make an existing loan more competitive.

Home Loan Experts can review your current loan, compare available options and help you understand how different interest rate scenarios could affect your repayments and borrowing position. Call us on 1300 889 743 or enquire online today.

Complete our 360° Home Loan Assessor to get started. It takes about two minutes, requires no login and does not affect your credit score.

This information is general in nature and does not take into account your personal objectives, financial situation or needs. Interest rate forecasts can change as new economic information becomes available.