The RBA held the official cash rate at 3.60%. 86% of Finder's economists and experts correctly predicted the decision.
The official cash rate is:
3.60%
The RBA's next interest rate decision is on:
09 December 2025
Of the experts surveyed by Finder for December:
100% predict the cash rate will hold.
"Mixed economic signals have kept the RBA in a holding pattern. While spending remains strong, rising inflation and increasing unemployment add complexity to the decision-making process."
These graphs show movements in the official cash rate over time and changes to the market's lowest home loan rates over the same period. You can see how the market responds by raising or lowering rates broadly in line with the RBA's decisions.
How often are Finder's expert predictions correct?
The latest cash rate analysis from the experts
Finder regularly surveys 40+ economists and property experts to forecast the RBA's next cash rate decision and get insights into the future of the Australian economy. Here are the most recent cash rate predictions.
Because the data show an economy that's steady but not strong, and inflation is still above target. There's no case to cut, but also no case to hike so the RBA will stay put.
Let's take a deep breath! We all know that the RBA will not move the cash rate. Various forces pull in opposite directions, but both, a CUT and a HIKE, are not consistent with RBA's mandate, communication, and practice ATM. And we mostly benefited from this reserved approach in recent years. This is what my forecasts indicate as well. They are centered around the current cash rate value with the confidence bands away from it on both sides. Surprisingly, some bond yield curve models would indicate a RISE at 68% confidence. They get outweighed in the pooled forecast, though. My forecasts are available at: https://forecasting-cash-rate.github.io/
During the last few months there has been a distinct whiff of stagflation. This month saw a soft GDP print, and the last two months of inflation data were ominous. Behind all this are governments that are reluctant to rein in either spending, or the business taxes and regulations that stunt our tax base. This month the Bank will probably sit on its hands. As we move through 2026, however, we will probably see one or two rises in the cash rate.
I think the RBA will stay on hold. Inflation has lifted again and unemployment is still low, so they'll want more evidence that price pressures are easing before considering rate cuts. I think the RBA will stay on hold. Inflation has lifted again and unemployment is still low, so they'll want more evidence that price pressures are easing before considering rate cuts. The housing market has finished the year with solid momentum, with conditions improving over 2025 as buyers took advantage of rate cuts and an undersupply of listings and new homes kept competition strong.
Just as the RBA wanted to see if the jump in the unemployment rate in September would persist before cutting, they will now want to see if the jump in year-ended inflation in the new comprehensive monthly measure translates into such a large increase in year-ended inflation with the quarterly measure. They won't have data on this until before the February meeting. So I think they are likely to hold at this meeting, awaiting more data to guide future movements. If future data releases continue to show a weakening labour market combined with little progress on inflation returning to the mid-point of the target range, I think they will hold for the timebeing. But I can imagine by mid-year 2026, there could be enough progress on inflation that they will want to test if the neutral rate is lower than the current setting.
As I have been saying for the past 12 months, the Federal Government's out of control spending would, and has, fuelled inflation. I have no reasonable expectation that rates will reduce anytime soon. In fact, I worry that rates will rise in February because there is nothing in the numbers or government policy to indicate anything other than rising costs in the near term. Labors approach (federal and state) of increasing spending and funding this through increased tax is a not going to increase productivity, drive economic growth in the private sector or address inflation. It will be left up to the RBA to fix the economic problem which it can only do through upward interest rate adjustments.
There is no doubt that inflation is not under control, and more and more pressure is being put on the economy. You won't be seeing any rate cuts in the short to medium term.
The RBA are firmly on hold now after recent inflation data has shown a renewed uptick in price pressures; although this may well be a temporary uplift and some emerging weakness in labour markets should still see one more cut in the cycle in mid-2026 to a more neutral cash rate.
The CPI surprisingly jumped up once again to 3.8 per cent in October. I still believe the board will keep cash rates on hold to end the year and gather more data, but a decision to increase the cash rate is definitely a possibility in early 2026.
The RBA can't ignore the increase in inflation since the middle of 2025. What remains unclear is whether this is the beginning of a new upward inflation cycle, or simply reflects the fact that "the last mile" of the inflation cycle which began in 2021-22 has proven harder to achieve than the earlier parts of it. I lean towards the latter explanation. I think it's more likely that, with consumer spending having picked up since earlier this year, businesses are now finding it easier to pass on cost increases which they've previously had to absorb into their profit margins. This should (and I think will) prompt the RBA from holding off on providing any further stimulus to aggregate demand until it's clear that this is no longer happening - which will take time - and, additionally, to limit the downside for rates from here to just one more cut.
Uptick in inflation and stubbornly low unemployment is concerning. Would rather the RBA do something swift rather than delaying the pain like the last rate cycle.
Another rise in inflation has put the possibility of cash rate in December off the cards and future cuts next year in greater doubt. While I know some commentators suggest we could see a rate rise next year, I can't see that happening with the information currently available.
Headline inflation increased by 0.2 percentage points in November to 3.7%, the main contributor being the big jump in the cost of electricity as state rebates were used up. Though these electricity costs are not pure inflationary effects, the optics will prevent the RBA from considering a rate cut.
There is still a possibility of another rate cut and inflation is likely to fall back to target but with growth likely to run around potential the most likely outcome is now for the RBA to leave rates on hold next year.
With recent inflation readings remaining at or above the top of the target range, the RBA is expected to maintain a cautious stance and keep the cash rate on hold for now.
The surprise increase in inflation in the latest CPI data appears to have ended any hopes of further rate cuts in this cycle. The high cost of housing continues to have a major impact, and the next rate move may well be a hike. Most people, mortgage holders especially, will hope this is some way off.
Inflation has been stronger than expected. This indicates that inflationary pressures in the economy are stronger than originally thought. I think the RBA will not increase interest rates until inflation has eased more.
It will be no surprise to anyone that the RBA will be The Grinch that Stole Christmas, not Santa, this December. Those last inflation numbers were a shocker and have seen a third major bank - ANZ - now rule out any more rate cuts this cycle.
Having misjudged the strength of inflation particularly in regard to the predictable post-subsidy spike in electricity costs, the RBA will hold rates but may have some difficult decisions in 2026 if inflation keeps rising as expected and the recent modest weaking of the labour market intensifies
No change in rates for a while, but with still soft GDP growth, we're likely to see the labour market soften enough to allow the RBA to cut once more in May.
I expect the RBA to hold the cash rate in December. Unfortunately for borrowers hoping for early Christmas relief, inflation is proving stickier than expected. With the latest ABS data showing the Consumer Price Index climbing to 3.8% well above the RBA's target band and trimmed mean inflation sitting at 3.3% in the 12 months to October, the Board can't justify another cut yet. That said, after three cash rate cuts this year, now is still a good time to review your home loan to ensure you're still on a competitive rate.
Whilst CPI has increased recently, the RBA will be slow to change rates. I believe they will want to see if inflation continues to rise or whether the recent moves were just short-term. At present, it is difficult to predict rate movements in 2026
Fiscal spend, weak productivity and growth risk a sustained rise in inflation after an increase in the last quarterly YoY report.
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The Reserve Bank of Australia sets the official cash rate target. This is a benchmark rate that has a big impact on home loan interest rates, savings accounts and other credit products.
What is the official cash rate?
One of the Reserve Bank's primary roles is setting monetary policy for the Australian economy. This involves setting the cash rate (or to use its full name, the official cash rate target).
At a technical level, the cash rate is actually the interest rate banks pay for borrowing money from each other overnight. Banks use this to manage liquidity and issue funds as needed.
Australian banks can borrow and deposit money with the RBA at just below the current cash rate target.
How the official cash rate target affects interest rates
But for the average Australian consumer, the cash rate is really useful as a broad benchmark for the interest rates on home loans and savings accounts. A high cash rate makes borrowing money more expensive and sees home loan repayments rise.
A low cash rate makes it cheaper to borrow money. This boosts borrowing and spending.
How has the cash rate changed over time?
The Reserve Bank adjusts the official cash rate target over time in response to various economic data, including:
Inflation
The unemployment rate
Global economic factors
The cash rate stayed at the then record low of 1.50% from 2016 to 2019, when the RBA lowered it further in response to low inflation and slightly higher unemployment.
Then as the Covid-19 pandemic began to hurt the Australian economy the RBA dropped the cash rate even further. This was to make borrowing cheaper and stimulate a struggling economy. The cash rate hit the record low of 0.10% during this time.
Now, with inflation soaring the RBA has lifted the cash rate very quickly to try to slow demand and curb price rises.
How does the RBA's cash rate decisions affect your finances?
The RBA can do 3 things with the cash rate: Raise, lower or hold the cash rate at its current level.
If the RBA lifts the cash rate
When the cash rate rises, most lenders pass on the rate rise to borrowers on variable rate home loans.
If the cash rate rises by 25 basis points, then most borrowers will see 25 basis points added to their home loan's interest rate.
If you have a fixed rate home loan nothing changes. Your rate is locked in for the duration of the fixed period.
When the RBA lowers the cash rate, most lenders pass on some if not all of the cut to borrowers on variable rate home loans.
Banks also lower rates on savings accounts and other products.
If you have a home loan, it's a good idea to check if your lender has actually passed on the rate cut to you. If it hasn't, you may need to switch.
If the RBA holds the cash rate
A hold decision means the cash rate isn't changing this month. This means that your home loan or savings account rate likely won't change. You don't really have to do anything.
But banks and lenders change interest rates all the time for various reasons even if the RBA doesn't move the cash rate.
Calculate how much a cash rate cut will impact your home loan repayments
Enter your loan amount, current interest rate and the latest cash rate change to quickly estimate how much your monthly repayments will change, and what your new repayment will be.
Example: how changes to the cash rate can change your loan repayments
You have a $600,000 home loan with a variable interest rate of 6.00%. It's a 30-year loan term with principal-and-interest repayments.
Your monthly repayments are $3,598.
⬆️ If the cash rate rises by 25 basis points your interest rate would increase to 6.25%. Your monthly repayments would now be $3,695. This would cost you an extra $97 a month or $1,164 a year.
⬇️ If the cash rate decreases by 25 basis points your interest rate would fall to 5.75%. Your monthly repayments would now be $3,502. This would save you $96 a month or $1,152 a year.
More questions about the RBA cash rate
Lenders are free to change interest rates on their products whenever they want. The cash rate is a big influence on rates, but there are many other factors. This includes a lender's own funding costs, the amount of deposits the lender has and how competitive it wants to be to attract new customers.
The RBA changes the cash rate target based on a range of factors including inflation, the performance of the Aussie dollar, unemployment, the housing market, and Australia's Gross Domestic Product (GDP).
For example, if inflation rises above the target rate it means that Australians are spending their money too freely and prices are increasing too rapidly. But if the RBA raises interest rates to make it more expensive to borrow money, the economy will settle and price increases will slow down.
Conversely, the RBA will drop interest rates if inflation is too low and the economy is stagnating, encouraging more Australians to spend more money and stimulate economic growth.
The Reserve Bank of Australia is the country's central bank. The RBA's monetary policy has three key objectives which are set out in the Reserve Bank Act 1959:
The stability of the currency of Australia.
The maintenance of full employment in Australia.
The economic prosperity and welfare of the people of Australia.
Setting the official cash rate is one of the bank's key tools to influence monetary policy, inflation and the broader Australian economy. The bank's board meets on the first Tuesday of every month except January to set the cash rate. The RBA will either cut, raise or hold the cash rate.
The RBA's board of governors meets 8 times a year, in February, March, May, June, August, September, November and December. It is here that the board makes a decision on the official cash rate target.
The board used to meet 11 times a year, on every first Tuesday of the month apart from January. It lessened the number of times it meets to provide more time for change between meetings.
However, the RBA can alter the cash rate at any time outside of the meetings. This is rare, but can happen. In March 2020, in response to the onset of the COVID pandemic, the bank cut the cash rate twice. Once at the scheduled meeting and then again mid-month at a special emergency meeting.
Check out more RBA news and Finder's RBA survey press releases
It was almost certain the RBA would hold the cash rate next week, until the unemployment figures came out. Now, the latest inflation data has given us a clearer indication.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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At this stage it’s impossible to say. The outlook for the moment is for rates to either fall slightly further or stay where they are, over the next 6-12 months.
Beyond that we just don’t know. For rates to start rising we’d need to see a big increase in inflation at least.
CuteyJune 16, 2022
When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.
Finder
RichardJune 18, 2022Finder
Hi,
The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.
So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.
The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.
I hope this helps.
Regards,
Richard
octoJune 18, 2018
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
NikkiJune 20, 2018
Hi Octo!
Thanks for getting in touch!
To know more information on your questions, you can fill in your email address in the box provided and you’ll be updated on RBA’s decisions on the official cash rate target.
While we provide you with general information, please know that we don’t stand as a representation for RBA or any company featured on our site.
Hope that clarifies!
Cheers,
Nikki
TaneeshaMay 24, 2018
Do you think the cash rate will stay the same at the June RBA meeting?
Finder
JoshuaMay 24, 2018Finder
Hi Taneesha,
Thanks for getting in touch with finder. I hope all is well for you. :)
Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
BrookMay 5, 2018
What do you think that how the international economic condition influence the cash rate?
Finder
JeniMay 6, 2018Finder
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
A rate cut appears imminent, and not just one, according to a new poll from Finder.
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when will rates increase
Hi Mark,
At this stage it’s impossible to say. The outlook for the moment is for rates to either fall slightly further or stay where they are, over the next 6-12 months.
Beyond that we just don’t know. For rates to start rising we’d need to see a big increase in inflation at least.
When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.
Hi,
The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.
So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.
The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.
I hope this helps.
Regards,
Richard
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
Hi Octo!
Thanks for getting in touch!
To know more information on your questions, you can fill in your email address in the box provided and you’ll be updated on RBA’s decisions on the official cash rate target.
While we provide you with general information, please know that we don’t stand as a representation for RBA or any company featured on our site.
Hope that clarifies!
Cheers,
Nikki
Do you think the cash rate will stay the same at the June RBA meeting?
Hi Taneesha,
Thanks for getting in touch with finder. I hope all is well for you. :)
Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:
– Household debt
– Inflation
– Wage growth
– Consumer Confidence Index
– Unemployment
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
What do you think that how the international economic condition influence the cash rate?
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
I hope this helps.
Have a great day!
Cheers,
Jeni