Finder’s RBA Survey: Nearly half predict cash rate reaches 4.85% by end of year

Borrowers are set for another dose of rate pain this Tuesday, with the overwhelming majority of experts tipping the RBA to lift the cash rate again, according to Finder.

In this month's Finder RBA Cash Rate Survey™, 41 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.

The majority of panellists (90%, 37/41) expect the RBA to hike the cash rate on Tuesday, raising it to 4.60%.

What's more, 48% (19/40*) expect at least one further hike by the end of 2026, with most tipping November.

Richard Whitten, home loans expert at Finder, said the reprieve of the past few months is over.

"Households got a short break over winter, but the data has turned and the experts think the RBA has no choice but to move again.

"Another hike would take the cash rate to its highest level in over a decade, and for a lot of borrowers who are already stretched, this one will really hurt.

"If your rate already starts with a '6' or a '7', it's worth picking up the phone. A quick call to your lender, or a switch to a more competitive loan, could save you more than the RBA is about to cost you," Whitten said.

When asked about the factors informing the RBA's call this September, 33 out of 41 answers pointed to the "stickiness" of inflation, with a rate rise intended to prevent it from becoming entrenched.

Dr Shane Oliver, Chief Economist at AMP said the RBA's credibility was on the line.

"While the RBA is meeting its full employment objective, this is not the case for its inflation objective, with underlying inflation running well above target… after more than five years of having inflation above target the RBA risks further losing its credibility if it decides to extend its wait and see approach," Oliver said.

A hike would cost the average borrower an extra $427 a month compared to January 2026

Aussies with the average home loan of $736,259 would pay around $427 more per month – roughly $5,124 a year – than they were at the start of 2026 if the cash rate rises to 4.60% on Tuesday.

Two hikes before the end of the year, as predicted by almost ½ of Finder's panel, would mean homeowners would kick off 2027 paying $542 more on their monthly repayments than they did 12 months prior.

Peter Boehm of Pathfinder Consulting said the RBA is trying to balance its two mandates – maintaining employment levels and reducing inflation.

"As a result, [the RBA] has held back increasing rates sooner to avoid the risk of pushing unemployment up.

"Unfortunately, there is no effective single strategy which addresses both objectives.

"Consequently, something has to give and so there is no alternative but to increase rates at the expense of pushing up the unemployment rate and possibly pushing the economy into recession."

Not everyone is convinced it's the right call. Adjunct Professor Noel Whittaker from QUT expects a hike but doubts it will work.

"I also think it will be a fairly pointless exercise. Higher rates will hit people with mortgages hard, while doing little to address the global forces now driving inflation," Whittaker said.

Are rate rises losing their punch?

Asked whether cash rate hikes are losing their effectiveness in slowing cash flow in the economy, the panel narrowly says no (47%, 15/32).

Just over a third (34%, 11/32) say they are, while 1 in 5 (19%, 6/32) were neutral.

The split points to a bit of unease – several who back Tuesday's hike simultaneously doubt it will work on this bout of supply-driven inflation.

Mala Raghavan from the University of Tasmania said the persistence of inflation should not be interpreted as evidence that cash rate hikes are losing effectiveness.

"Instead, sectoral evidence suggests monetary policy is working as expected in interest-sensitive sectors, particularly for goods inflation. In contrast, services inflation remains elevated because it is driven by labour intensive, non-tradable components that respond more slowly to interest-rate changes."

Asked whether leaning primarily on interest rates is an appropriate and equitable way to control inflation, the panel is broadly sceptical on equity while accepting rates as the main tool available.

The recurring theme: the burden falls disproportionately on mortgage holders and younger, indebted households.

Nicholas Gruen from Lateral Economics said raising rates isn't an equitable way to do it but given the way politics works, it's what we're left with.

"We should be using a wider array of instruments such as varying super contributions and some independence of the fiscal stance – via independent control of across the board tax changes," Gruen said.

Leanne Pilkington from Laing+Simmons said, "Interest rate increases are a blunt instrument which are having a disproportionate impact on people in the lower socio-economic demographic."

James Morley from University of Sydney said, "Conducting monetary policy via the interest rate transmission mechanism is the best way to achieve the RBA's mandate. It would, of course, help if fiscal policy did not fuel inflation."

*Experts are not required to answer every question in the survey.

Here's what our experts predicting a hold had to say about the cash rate:

Evgenia Dechter, UNSW (Hold): "It is a difficult call. Economic growth is weak and unemployment is rising, so the RBA has to weigh the risk of persistent inflation against the risk of slowing the economy too much."

Mark Crosby, Monash University (Hold): "Despite indicators of rising inflation there is equally evidence of a weakening economy that would warrant a wait and see approach for another few months."

Tim Reardon, HIA (Hold): "Home prices are falling, that is a symptom of the previous rate increases that will, with time, flow through to reduced inflationary pressures."

Cameron Murray, Fresh Economic Thinking (Hold): "Momentum in the economy isn't picking up, and they expect continued softening in line with global trends."

Here's what our experts predicting an increase had to say about the cash rate:

Matthew Greenwood-Nimmo, University of Melbourne (Increase): "Inflation is still stubbornly above the target and recent remarks by RBA officials have taken on a somewhat hawkish tone, which may indicate that they are increasingly willing to see unemployment rise a little to ease inflationary pressure. I think the RBA will most likely raise the cash rate at this meeting."

Tomasz Wozniak, University of Melbourne (Increase): "It's a likely RAISE! My forecasting system indicates an 82 percent probability of such an outcome. All the bond yield curve models say so, but not those that rely on international rates or cash rate dynamics alone. A rate hike seems in line with the RBA's recent communication, the cash rate staying above the target and inflationary pressures. My forecasts are available at: https://forecasting-cash-rate.github.io/"

Scott Kuru, Freedom Property Investors (Increase): "It's pretty clear from everything that Michele Bullock and other RBA staff have said in recent days that inflation is tracking higher than they expected...possibly considerably higher. It would be a Hail Mary event if they didn't pull the trigger for a rate rise on Tuesday."

Shane Oliver, AMP (Increase): "While the RBA is meeting its full employment objective this is not the case for its inflation objective with underlying inflation running well above target and looking like it's going to take longer to get back to target than the RBA was forecasting in August. While cooling growth and the housing downturn should start to take pressure off inflation it's early days and after more than five years of having inflation above target the RBA risks further losing its credibility if it decides to extend its wait and see approach."

Dr Andrew Wilson, My Housing Market (Increase): "Clear signal in last month's commentary that rates would likely rise due to the clear prospect of elevated inflation - particularly in regard to fuel"

Trent Wiltshire, RLB (Increase): "The upside risks to the inflation outlook have partly eventuated, and the RBA has signalled in recent comments they will raise rates to lower inflation and inflation expectations."

Nicholas Frappell, ABC Refinery Pty Ltd (Increase): "An increased focus on reining in inflation, which has been above target for over 4 years."

Sophia Angala, ANZ Research (Increase): "Underlying inflation has proved more persistent than expected, while the re-escalation in the Middle East conflict and higher oil prices have increased the risk of second-round inflation effects. As a result, we expect the RBA to raise the cash rate by 25bp in both September and November 2026."

Nalini Prasad, UNSW Sydney (Increase): "Inflation remains a concern. It's remained high. The RBA will want to keep a hold of inflation expectations in the face of higher oil prices and concerns about government debt levels."

James Morley, University of Sydney (Increase): "Inflation and the RBA's inflation forecasts are above the range the RBA would be comfortable with given the current level of interest rates. Thus, they are very likely to raise the cash rate to show a response to inflation. Economically, the effects of the oil price shock on the economy look to be more persistent than the best case scenario from when it first hit. Labour market conditions are weakening. But the RBA will see the economy as being close enough to a (weak) level of potential such that real economy won't be playing much role in pulling inflation down. Also, there is a general sense that the neutral rate of interest is higher than it was a few years ago due to global conditions, including in terms of fiscal profligacy. Taken together, these considerations imply the RBA will raise rates at the next meeting and likely the one after unless some new data comes in to ease their concerns about inflation."

Garry Barrett, University of Sydney (Increase): "Underlying inflation persistently outside target."

Mark O'Flynn, Oxlade Financial (Increase): "Higher inflation than target."

Geoffrey Kingston, Macquarie University Business School (Increase): "The latest reports on the labour market and prices show that efforts to dated by the Bank. to bring inflation back within the target band, have fallen short. Bank officials have signalled in recent days that they are concerned that inflation expectations could become unanchored."

Nicholas Gruen, Lateral Economics (Increase): "They seem to be telegraphing as much"

Mala Raghavan, Tasmanian School of Business and Economics, University of Tasmania (Increase): "With inflation remaining above target, tight labour market conditions easing only gradually, and geopolitical tensions continuing to generate supply-side cost pressures, the RBA is likely to maintain a tough stance on interest rates this time and increase the cash rate despite concerns about economic sluggishness in some sectors. The US Federal Reserve's recent interest rate hike has further strengthened the case for tighter monetary policy. If the RBA fails to take action, it could lead to a weaker dollar, higher import prices, and increased domestic inflationary pressures. This situation reinforces the need for the RBA to focus on containing inflation."

Sam White, Loan Market (Increase): "To help get inflation under control. The RBA has stated inflation is its key priority, and with this remaining sticky and above target, it is likely the Board will move to increase the cash rate."

Jeffrey Sheen, Macquarie University (Increase): "The RBA's managers have given very strong indications that they will recommend raising the cash rate. Business leaders in the BOSS survey expect it. Financial markets have priced in a high probability of it occurring. Interest rates are rising globally."

Peter Boehm, Pathfinder Consulting (Increase): "The RBA is trying to balance maintaining employment levels and reducing inflation. As a result, it has held back increasing rates sooner to avoid the risk of pushing unemployment up. Unfortunately, there is no effective single strategy which addresses both objectives. Consequently, something has to give and so there is no alternative but to increase rates at the expense of pushing up the unemployment rate and possibly pushing the economy into recession. With inflation consistently above the target range the RBA must increase rates in September, with possibly two further rate increases to follow."

Mathew Tiller, LJ Hooker Group (Increase): "I expect the RBA to increase the cash rate. Inflation is proving to be stubborn and there are still some upside risks on the horizon given what's happening in the Middle East and the ongoing tightness in the labour market. The housing market is also continuing to soften. Prices are declining as confidence softens, household budgets come under more pressure and some investors sit on the sidelines because of the tax changes. Another rate rise will only add to that pressure. Buyers will be more cautious, while some vendors may simply decide to hold off selling."

Adj Prof Noel Whittaker, QUT (Increase): "The bond markets are telling us that interest rates are on the rise around the world, and Australia will be no exception. Inflation is still not under control, the war in Iran shows no sign of ending soon, and the Reserve Bank has given strong hints that it will not hesitate to raise rates if necessary. So I expect rates to rise. But I also think it will be a fairly pointless exercise. Higher rates will hit people with mortgages hard, while doing little to address the global forces now driving inflation."

Tim Nelson, Griffith University (Increase): "Inflation has crept up again and its composition implies its more than just higher oil and commodity prices."

Cameron Kusher, Kusher Consulting (Increase): "Inflation is too high, economic growth was stronger than forecast and oil prices have risen quickly and are an input to many other goods in the CPI bucket."

Leanne Pilkington, Laing+Simmons (Increase): "The RBA's references to persistent inflation suggest another rise, and perhaps rises, are coming. Missing, though, is recognition that consumers are not paying higher prices for items like fuel, food and rent out of choice. They have no choice. Higher prices are the result of macro factors and these won't be impacted by interest rate hikes."

Craig Emerson, Emerson Economics (Increase): "The RBA has almost explicitly said it will increase the cash rate."

Brodie Haupt, WLTH (Increase): "Higher global oil prices flowing through to increased inflation might force the RBA board to increase the cash rate sooner than expected."

Dale Gillham, Wealth Within Group (Increase): "The RBA has kept rates at it's current level since the increase in May and inflation is not coming down. Oil is now back around $100 where it was in May, and energy costs are once again rising on the back of it. I expect a 25 basis point rise at the next RBA meeting."

David Robertson, Bendigo Bank (Increase): "The recent rebound in oil prices together with more evidence of elevated core inflation prior to this impact leaves the RBA with little choice but to increase official rates this month. Our forecasts had predicted this hike in November, but the timeline is now more compressed."

Stella Huangfu, University of Sydney (Increase): "Inflation remains too high, with underlying inflation proving persistent and still well above the RBA's target range. Domestic capacity pressures remain, while higher energy costs continue to pose upside risks to inflation. Given these pressures, I expect the RBA to raise the cash rate by 25 basis points in September."

Kyle Rodda, Capital.com (Increase): "Inflation is elevated and the RBA has indicated that it is weighting policy towards price stability over the labour market."

Graham Cooke, Aussie Insights (Increase): "Australian inflation has not cooled as quickly as anticipated. With the worsening crisis in the Middle East putting upward pressure on oil prices, the RBA will likely act to counter these inflationary pressures, just as the US Federal Reserve did this month - against the wishes of Donald Trump."

Jakob Madsen, University of Western Australia (Increase): "RBA Governor Michele Bullock correctly highlighted that upside risks to inflation are materializing. Higher global energy and commodity prices, driven by ongoing geopolitical tensions and supply disruptions, have added sustained pressure to domestic consumer prices."

Michael Yardney, Metropole Property Strategists Pty Ltd (Increase): "Interest rates are likely to rise at the RBA's next meeting because underlying inflation remains stubbornly above target, while the labour market is still relatively tight. With global cost pressures increasing and the RBA warning that inflation risks are materialising, the Board may decide that another rate rise is necessary to prevent inflation becoming entrenched."

Stephen Koukoulas, Market Economics (Increase): "Global inflation pressures are evident in Australia."

Matt Turner, GSC Finance (Increase): "Inflation high with ongoing conflict and government spending remaining still elevated. No choice left to reign it all in but raise rates."

Saul Eslake, Corinna Economic Advisory Pty Ltd (Increase): "'Underlying' inflation remains well above the RBA's target, and recent comments by senior RBA officials suggest their willingness to tolerate this is fading. Recent developments in the Middle East represent further upward risks to the inflation outlook which the RBA will find it difficult to ignore."

Stephen Miller, GSFM (Increase): "Inflation is too high and too 'sticky'."

Anthony Waldron, Mortgage Choice (Increase): "ABS data shows that trimmed mean inflation, the RBA's preferred measure, remains high. Earlier this month, at the House of Representatives Standing Committee on Economics Governor Bullock made clear that bringing inflation down is essential. This keeps a fourth cash rate hike firmly on the table this year either at this month's meeting, or in November."