<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/australia" rel="" target="" title="Australian"><span>Australian</span></a><span> borrowers have been warned to expect even more mortgage pain in the coming months after </span><a href="https://www.9news.com.au/finance/rba-interest-rates-live-updates-february-2026-decision-latest-news-headlines/cec87747-a086-4fb9-aab2-29f5790794d1" rel="" target="" title="yesterday's interest rate hike"><span>yesterday's interest rate hike</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The </span><a href="https://www.9news.com.au/reserve-bank-australia" rel="" target="" title="Reserve Bank's"><span>Reserve Bank's</span></a><span> monetary policy board unanimously decided to raise the </span><a href="https://www.9news.com.au/interest-rates" rel="" target="" title="cash rate"><span>cash rate</span></a><span> by 25 basis points, up to 3.85 per cent, at its first meeting of the year, in a move widely expected by economists.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In her press conference following the decision, </span><a href="https://www.9news.com.au/michele-bullock" rel="" target="" title="RBA Governor Michele Bullock"><span>RBA Governor Michele Bullock</span></a><span> would not be drawn on whether future hikes were likely.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/artificial-intelligence-system-says-it-would-kill-a-human-to-maintain-its-existence/afe447c6-b98d-49c5-b4d5-4f5ecd36b7e7"><strong><span>AI bot says it would kill a human to avoid shutdown</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"It is not the same as the tightening cycle when we were coming out of COVID, when we were coming from a 0.1 per cent cash rate; it was quite clear that we had to go up and we had to go up quickly," she told reporters. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This isn't as clear."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Others aren't as circumspect.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/finance/interest-rates-australia-forecast-2026-rba-hike/78b14cd1-8594-499e-a22a-9046ca0a9624" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Commonwealth Bank has now changed its interest rate outlook for the year, joining NAB in pencilling in a hike to 4.10 per cent in May.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/ebike-sydney-harbour-bridge-footage/8eb12ffa-25bc-4d5a-8b35-d404e142e0ba"><strong><span>Dozens of e-bike 'hoons' filmed riding over Sydney Harbour Bridge</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/interest-rates-major-banks-announce-rate-changes-following-rba-hike/ef7913a0-37ce-49a0-a063-ce159c48d6b2"><strong><span>Big four banks all pass on RBA rate hike</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The RBA's updated forecasts now have inflation remaining above the 2-3 per cent target until mid-next year, while core inflation isn't predicted to reach the middle of that band until 2028.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>CBA head of Australian economics Belinda Allen said that "will not be tolerated by the RBA".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The risk always sat with a second rate hike to bring inflation back towards target and the economy back into balance," she wrote.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"With the labour market now in a better position than a few months ago, and an increased resolve from the RBA, on the balance of probabilities we now see the RBA hiking again in May to take the cash rate to 4.10 per cent.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/heat-rule-australian-council-of-trade-unions-leads-push-for-tradies-to-stop-work-in-extreme-heat/7c21be95-9e1d-4e0a-aab2-bd8eec99867d"><strong><span>New push for tradies to stop work in extreme heat</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But it remains a line-ball decision and is dependent on the data flow from here."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The remaining two big four banks – Westpac and ANZ – are tipping interest rates will remain on hold for the rest of the year, although both have admitted there is a risk of another hike.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The low bar for further hikes means that, (without) a downside surprise in the March quarter inflation outcome, the monetary policy board is likely to hike again in May," Westpac chief economist Luci Ellis said.  </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In a further blow to the likelihood of inflation cooling off quicker – and potentially avoiding the RBA pushing up rates again – new research from non-profit the e61 Institute showed yesterday's rate increase may not do much to slow down rising prices.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Raising rates may not have a large impact on consumer spending in the near term," research director Dr Gianni La Cava said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/finance/interest-rates-more-than-one-in-three-mortgage-holders-struggling-with-repayments/a130f045-2ded-4ff2-898b-3eeba1f92a65"><strong><span>More than a million homeowners struggling to pay mortgage</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We found that when the RBA hiked rates by 4.25 percentage points over 2022 and 2023, people with variable mortgages barely changed their spending habits despite payments rising by $14,000 a year on average.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This was because they could mostly finance the extra payments from large savings held in offset and redraw accounts. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Those savings absorbed the shock, letting many households preserve their lifestyles despite higher interest costs. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In late 2025, households still had significant buffers in their offset and redraw accounts, with 40 per cent of mortgage holders holding enough savings to make minimum payments for two years.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This indicates that the latest interest rate rise will likely have a limited impact on spending through the cash flow channel."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><span> 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