Commonwealth Bank and ANZ issue an urgent warning to Aussies with a mortgage: Brace for even more rate rises
Commonwealth Bank and ANZ now expect the Reserve Bank of Australia to raise the cash rate by 0.25 percentage points in November, to 4.60 per cent, reversing earlier expectations of eventual rate cuts. If realised, the increase would take rates to their highest level since October 2011 and add further strain to households already facing higher mortgage payments and living costs.
The forecasts followed July inflation data showing headline inflation falling from 3.8 to 3.5 per cent, while underlying trimmed-mean inflation remained at 3.6 per cent. Canstar estimates the proposed rise would add about $91 a month to a $600,000 mortgage with 25 years remaining, or $152 for a $1 million loan; borrowers facing three rises this year would be paying roughly $363 more each month than at the start of 2026. NAB is reviewing its outlook, while RBA meeting minutes and economists cited in the article indicate concern that persistent core inflation could require tighter policy.
- CBA and ANZ forecast a November RBA rate rise.
- A 4.60 per cent cash rate would be the highest since 2011.
- Persistent underlying inflation is driving renewed rate-rise expectations.
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The Reserve Bank of Australia sets the cash rate, which influences the interest rates banks charge on mortgages and other loans. Commonwealth Bank and ANZ are two of Australia’s largest banks; their forecasts reflect how they think the central bank may respond to inflation.
Inflation is the rate at which prices rise. The Reserve Bank considers both overall inflation and underlying measures that try to show whether price rises are persisting, because its decisions aim to keep inflation under control while supporting the economy.
When mortgage rates rise, people with home loans may face higher monthly repayments, leaving less money for other costs. The effect depends on the size and terms of each loan, and can add to pressure on household budgets.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Core inflation at 3.6 per cent remains persistently above the RBA's 2-3 per cent target, and maintaining policy credibility requires sustained tightening until inflation convincingly returns to goal. Markets and households may interpret premature rate cuts as a policy reversal, potentially unanchoring inflation expectations and necessitating even more painful future tightening that inflicts greater cumulative economic damage.
The case against
Headline inflation is already falling toward the RBA's target range at 3.5 per cent, and previous rate increases have not fully transmitted through the economy given the significant lag in monetary policy effects. Households facing severe cost-of-living pressures and existing mortgage stress risk genuine economic harm through consumption collapse and job losses; the RBA should wait for clearer evidence of sustained disinflation rather than pursue tightening that may prove counterproductive.