Finder’s RBA Survey: Third rate hike in 2026 will cost average borrower $2,661

The RBA has raised the cash rate for the third time this year, bringing it to 4.35% in May.

In this month's Finder RBA Cash Rate Survey™, 36 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.

Three-quarters of the panel (75%, 27/36) correctly predicted the cash rate hike, which completely wipes away the three cuts from 2025.

Richard Whitten, home loans expert at Finder, said the move is a devastating blow for many homeowners already doing it tough.

"Being back at a 4.35% cash rate will feel like a big backward step for those with a mortgage.

"While this was the peak two years ago, the cost of living has continued to climb since then, meaning the same rate now carries a much heavier weight.

"Now is the time to explore your options. If you haven't refinanced or asked your lender for a better deal, you're almost certainly paying too much," Whitten said.

Finder's data shows 39% of Aussie homeowners say they are struggling to pay their mortgage in April. That's up from 35% in January this year.

The decision to hike the cash rate in May will cost the average borrower an extra $2,661 a year (compared to what they were paying at the start of 2026).

Experts weigh in on the RBA's power to curb "imported" inflation

Inflation figures released in April show an annual rise of 4.6% – a big jump (last month it was 3.7%).

Experts were asked: How can the RBA and the government effectively tackle local inflation when the primary drivers are global in nature?

While the spark of inflation may be global, the panel largely believes the fuel is domestic.

The consensus is that Australia must focus on what it can control: government spending, productivity, and ensuring that temporary global shocks do not become permanent domestic fixtures.

Some argued for targeted relief for vulnerable households and broad tax reforms to address inflation, while others argued that it is a symptom of deeper, domestic structural failures.

Here's what they had to say:

Dale Gillham, Wealth Within Group: "We fix it by focusing on local things that matter to Australians. We keep trying to play on world markets and be involved in world issues, when we should spend far more time on local issues. We have enough resources not to have any worries about energy, and we have enough farms and land to support ourselves. The issue is that we don't support Australian businesses or individuals, so we can prosper. Rather, our government just wants to tax us more and make us more reliant on other nations. So, unless we start looking after ourselves, how can the country move forward, reduce inflation, make housing affordable and look after all Australians."

Adj Prof Noel Whittaker, QUT: "The only solution is to cut government spending."

Evgenia Dechter, UNSW: "The government should exercise spending restraint and keep fiscal policy aligned with the monetary policy and disinflation."

Mala Raghavan, University of Tasmania: "Controlling inflation has become increasingly challenging for the RBA due to both external and domestic factors driving current price pressures. Global supply-side disruptions, driven by geopolitical tensions and energy market volatility, are leading to significant cost-push inflation largely beyond the reach of domestic monetary policy. Meanwhile, strong labour market conditions and resilient household demand are contributing to demand-pull inflation. Although a tighter monetary policy can help reduce domestic demand and mitigate demand-pull inflation, it is less effective at addressing externally driven cost shocks. This dual dynamic of inflation complicates the RBA's efforts to restore inflation to its target level quickly."

Peter Boehm, Pathfinder Consulting: "By eliminating other primary drivers which have occurred domestically - like government spending."

Rich Harvey, Propertybuyer: "Major tax reform put GST to 15%. Reduce personal taxes to max 25%. Reduce business tax to 20%. Create incentives for businesses to innovate and compete better on the world stage. Implement AI everywhere to increase productivity. Reward those that are entrepreneurial rather than tax them more."

Stella Huangfu, University of Sydney: "The RBA cannot lower global fuel or fertiliser prices, but it can stop the shock from turning into persistent local inflation by keeping inflation expectations anchored. Higher rates can reduce second-round effects, such as firms raising prices more broadly or workers demanding larger wage increases. The government can help with targeted, temporary relief for households and firms most affected, rather than broad stimulus that adds to demand. The key is to ease the pain without making inflation worse."

Jeffrey Sheen, Macquarie University: "The RBA can keep monetary policy restrictive enough to prevent global price shocks from passing through into wages, margins and broad-based "second-round" inflation. It can anchor expectations with clear guidance that it will respond to persistence in core inflation, while looking through 'one-off' headline spikes in price levels. The government can provide targeted, temporary cost-of-living relief that protects vulnerable households without boosting demand. It can also reduce Australia's exposure to global shocks by improving energy and transport supply resilience, improving competition, and removing domestic bottlenecks that keep prices high."

Leanne Pilkington, Laing+Simmons: "A more balanced and nuanced view of household expenditure as applied to discretionary versus non-discretionary items seems appropriate."

James Morley, University of Sydney: "The primary drivers of trend inflation are domestic (cf. Kamber and Wong, 2020). So the RBA needs to respond to any persistent movements in inflation, regardless of their origin, before they get embedded into domestic expectations."

Saul Eslake, Corinna Economic Advisory Pty Ltd: "By ensuring that the economy doesn't grow at a faster rate than its "speed limit", dictated by the combination of available spare capacity (minimal) and growth in capacity (pretty low). That requires some combination of restrictive monetary and fiscal policy. If we get more of the former we will need less of the latter."

Stephen Miller, GSFM: "I think there are domestic and global drivers. The domestic ones are around inattention to structural elements to the economy "unintended consequences" of regulatory creep. It is important not to accommodate global drivers of inflation, including oil prices."

Craig Emerson, Emerson Economics Pty Ltd: "By not tightening excessively."

Garry Barrett, University of Sydney: "Tight monetary policy, clarity and guidance for expectations formation."

Jakob Madsen, University of Western Australia: "Short term, there is not much they can do. Long term they need to get Austrians off the petrol. They should have done that several years ago. A clever energy strategy will eliminate the impact and the support for the fascist regimes in the Middle East."

Kyle Rodda, Capital.com: "Both should look through the crisis. But inflationary pressures were a problem before the war. As a result, the RBA will need to nudge rates higher. The government should moderate spending in the short-term. In the bigger picture, huge structural reforms are needed to revitalise the economy."

Mark Crosby, Monash University: "While the primary drivers are international, local factors are still playing a role. Outsize government spending is a key factor that needs to be brought under control."

Matt Turner, GSC Finance: "[The] Government is doing its bit by reducing excise and GST collection on fuel - we now need to see reduced Government expenditure. Ultimately, even with the drivers coming from a global level there are so many micro-economic policies that can be implemented to soften the blow domestically."

Michael Yardney, Metropole Property Strategists: "There's only so much the RBA can do when inflation is being driven by global factors like energy prices or supply chain disruptions. Higher interest rates mainly dampen local demand, but they don't fix the root cause, so their real role is to keep inflation expectations under control and stop temporary shocks from becoming embedded in wages and prices."

Nalini Prasad, UNSW Sydney: "The RBA needs to make sure that inflation expectations are anchored regardless of where the underlying shock comes from."

Nicholas Gruen, Lateral Economics: "They can't do so directly or in the short term. Governments can pursue productivity-improving reform, and it's a pity we've seen so little from the recent talk fest held on it. But that's still really a longer-term policy and always worth pursuing. The authorities should also explain that, as an importer of liquid fuel, increased global prices reduce Australia's national income. That reduction should be shared as equitably as we can manage - over as broad a base as possible."

Scott Kuru, Freedom Property Investors: "Well the government can do the kind of thing it has done - scrap the fuel excise and ensure supplies. Hard to really know how the RBA can "help", as they are likely to raise rates, despite the very real impacts of the crisis on already struggling Aussies."

Shane Oliver, AMP: "The surge in oil prices is global in nature but underlying inflation of 3.3% is way above target and mostly homegrown due to capacity constraints and poor productivity. So the solution to getting underlying inflation back down sustainably is to cut back government spending to free up capacity in the economy and cut regulation and reform the tax system to boost productivity."

Tim Reardon, HIA: "The major drivers for inflation until this past month is the acute shortage of housing, they can resolve this by removing taxes that impede housing supply."