Are Interest Rates in Australia Going to Increase More in 2026?

Mortgage Broker & Buyer’s Agent Insight | Truth Group

As we move through 2026, many Australian homeowners, buyers, and property investors are asking the same question:

Are interest rates in Australia going to increase more in 2026, and how should I plan my mortgage around it?

Will interest rates go up again, or have we reached the peak?

With the Reserve Bank of Australia (RBA) recently shifting its stance and inflation still sitting above the target range, interest rates are firmly back in the spotlight.

In this article, I’ll break down what’s happening with interest rates in Australia in 2026, what the RBA is watching, and what this means for borrowers.

—

Where Are Interest Rates Sitting in 2026?

In early 2026, the RBA lifted the official cash rate again after a long pause, signalling that inflation pressures are proving more stubborn than expected.

While rates are nowhere near the emergency lows of previous years, the RBA’s message is clear:

> Inflation is still too high, and further action remains on the table if needed.

This has led many economists and major banks to revise their forecasts and reintroduce the possibility of additional rate increases during 2026.

—

Is the RBA Likely to Increase Rates Again?

The short answer: Possibly…but not aggressively.

The RBA has repeatedly stated it is data‑dependent, meaning future decisions will be driven by economic indicators rather than a fixed plan.

Key factors influencing rate decisions in 2026 include:

• Inflation levels – The RBA’s target remains 2–3%. Any sustained movement above this range keeps upward pressure on rates.
• Wages growth – Strong wage growth can fuel inflation if not matched by productivity gains.
• Consumer spending – If households continue spending despite higher rates, the RBA may feel more tightening is required.
• Employment conditions – A tight labour market reduces the urgency to cut rates.
• Global economic pressures – Overseas interest rates, energy prices, and geopolitical events all play a role.

Most forecasts suggest one additional rate rise is possible in 2026, followed by a holding period — rather than a long series of increases.

—

What This Means for Home Loan Borrowers

For existing variable‑rate borrowers

If rates increase again:

• Monthly repayments may rise further
• Household cash flow could tighten
• Refinancing and loan structure become more important than ever
• Even a 0.25% increase can have a noticeable impact on repayments, especially for larger loan balances.

For fixed‑rate borrowers

Many borrowers who fixed their loans in previous years are now rolling off onto much higher variable rates. In 2026, this remains one of the biggest pressure points for households.

This makes reviewing your loan before your fixed period ends critical.

—

What About Property Buyers and Investors?

Higher interest rates don’t necessarily mean property opportunities disappear……but they do change the strategy.

For home buyers:

• Borrowing capacity may be slightly reduced
• Competition can ease in some markets
• Negotiating power often improves

For property investors:

For investors with a solid asset base, structure and long‑term planning matter more than short‑term rate movements.

—

Should You Fix or Stay Variable in 2026?

In 2026, many borrowers are considering:

• Split loans (part fixed, part variable)
• Variable loans with offset accounts to reduce interest
• Shorter fixed terms to retain flexibility

The right choice depends on your income, risk tolerance, investment plans, and time horizon.

—

Why 2026 Is a Smart Time to Review and Refinance Your Home Loan

Many borrowers assume refinancing is only worth doing when rates are falling. In reality, 2026 is one of the most important times to review your loan, especially with uncertainty around further rate increases.

Here’s why refinancing makes sense right now:

• Loyalty tax is real – Many lenders reserve their sharpest rates for new customers, not existing ones.
• Your loan may no longer suit your situation – Income, equity, property value, and goals change over time.
• Small rate differences add up – Even a 0.20–0.40% improvement can save thousands over the life of a loan.
• Better structures are available – Offset accounts, redraw flexibility, and split-loan strategies can significantly reduce interest paid.

If you haven’t reviewed your loan in the last 12–24 months, there’s a strong chance you’re paying more than you need to.

—

Signs It Might Be Time to Refinance in 2026

You should consider refinancing if:

• Your rate has crept up without explanation
• You’re coming off a fixed rate onto a high variable rate
• You’ve built equity and want to restructure your loan
• You’re planning to buy, invest, or consolidate debt
• Your cash flow feels tighter than it should

Refinancing isn’t just about chasing the lowest rate — it’s about making sure your loan works with your broader property and financial strategy

—

Final Thoughts: What to Do Next

Mortgage Planning Matters More Than Rate Guessing

While further interest rate increases in Australia are possible in 2026, the general expectation is that we are closer to the top of the cycle than the beginning.

The bigger risk for most borrowers isn’t guessing the next rate move it’s:

• Being on the wrong loan
• Paying a loyalty tax
• Not reviewing your structure as conditions change

At Truth Group, I help clients with mortgage planning and refinancing strategies designed to improve cash flow and support long-term property goals….whether you’re an owner‑occupier or a property investor.

If you’re searching for a mortgage broker near me or buyers agent and want a clear answer on whether refinancing makes sense for you in 2026, a structured loan review can often uncover savings and better options.

If you’re unsure how potential rate changes could affect you in 2026, getting clarity now can save you significant money over the long term.

—

This article is general information only and does not constitute financial advice.