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CBA says cash rate could hit 2.6% by November – what will that cost borrowers?

Liz Seatter avatar
Liz Seatter
- 4 min read
CBA says cash rate could hit 2.6% by November – what will that cost borrowers?

The RBA rate hikes could come faster than expected – with Australia’s largest bank now forecasting the cash rate to hit 2.6 per cent by November.

CBA has updated its cash rate forecast and now expects the RBA to make a 0.50 percentage point hike in August, followed by another 0.50 hike in September and a 0.25 hike in November – taking the cash rate to 2.60 per cent.

Big four bank’s cash rate forecasts: how the next months could unfold

  • CBA: cash rate to rise by 0.50% in August and reach 2.60% by November this year.
  • Westpac: cash rate to rise by 0.50% in August and get to 2.60% by February 2023.
  • NAB: cash rate to rise by 0.50% in August and hit 2.60% by February 2023.
  • ANZ: cash rate to rise by 0.50% in August and reach 3.10% by February 2024.

Analysis from RateCity.com.au shows if the cash rate hits 2.60 per cent by November, as now forecast by CBA, someone with a $500,000 mortgage in May, before the hikes began, could see their monthly repayments rise by $687 in total.

For someone with a $1 million mortgage, repayments could rise by a total of $1,373.

CBA’s new cash rate forecast: impact on average variable rate customers

NOTE: Calculations are based over 25 years.

Loan sizeRepayments 1 May 2022Repayments Dec 2022Difference












Source: RateCity.com.au. Based on an owner-occupier paying principal and interest with 25 years remaining. Starting rate is the RBA average existing owner-occupier variable rate of 2.86% on 1 May.

RateCity.com.au research director, Sally Tindall, said: “Borrowers need to strap in for one of the fastest rises to the cash rate in our history."

“CBA now believes the cash rate could hit 2.60 per cent by November – that would be a rise of 2.50 percentage points in the space of seven months,” she said

“The last time the RBA hiked the cash rate this quickly was back in 1994, when the central bank increased rates by 2.75 per cent in the space of just five months.

“Central banks around the world are hiking furiously to curb inflation. While there are a number of domestic factors at play here in Australia, it’s hard to see the RBA taking its foot off the accelerator at a time when its counterparts are going full throttle.

“This is turning into a pressure cooker situation for many borrowers. As interest rates rise, so will the number of households in mortgage stress.

“Some variable rate borrowers may find their interest rate could double by the end of the year from what they were on before the RBA hikes began in May.

“If you don’t think you’ll be able to afford your monthly mortgage repayments by Christmas, take action now.

Refinancing to a lower mortgage rate can be one of the most effective ways to inject real relief into your budget. Just be mindful of the fact, that as rates rise, it will become harder to refinance, particularly if money is already tight, as you might not pass the banks’ stress tests on a significantly higher rate,” she said.

Tips for people worried about rising monthly mortgage repayments:

  • Don’t panic - keep making your repayments: If you are able to, continue to make your monthly mortgage repayments and take time to see how much of a buffer you have.
  • Haggle for a better rate: If your bank is advertising lower rates on their website for new customers – call them and ask them to match it.
  • Shop around: If your mortgage rate isn’t competitive, you could potentially save thousands by shopping around and refinancing with a lower-cost lender.
  • Tighten your belt: If you are struggling with the higher repayment, see how you can make lifestyle, so that you spend less every single week. That might be fewer dinners out and less takeaway coffees.
  • Review your other bills: Put your regular bills under the microscope to see where you might make changes, such as your energy, phone and internet packages.
  • Push for a pay rise: If you haven’t had a decent wage increase recently, now is the time to talk to your boss about a pay rise.
  • Ask for help early: Before you miss a mortgage repayment, call your bank to see what options you have. You can also call a financial counsellor for advice. The National Debt Helpline is: 1800 007 007.

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This article is over two years old, last updated on July 15, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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Product database updated 21 Jul, 2024

This article was reviewed by Data Research Specialist Piyush Pillai before it was published as part of RateCity's Fact Check process.

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