Will home loan interest rates go down? October 2026 outlook

Neither CBA’s 29 September outlook nor Westpac’s 30 September assessment points to a cash-rate cut in 2026. The RBA has also left open the possibility of further increases while inflation remains too high.

Your mortgage rate can still change independently. The RBA sets the cash rate; your lender sets the rate on your loan. A competitive refinance offer may be available even when the RBA is holding or raising rates.

When comparing loans, use the rate you qualify for and your remaining term. A headline about the cash rate cannot tell you what your own repayment will be.

A rise from 6.00% to 6.25% would add about $113 a month to a $700,000 principal-and-interest loan with 30 years remaining. Put that amount into your budget alongside the bills you already pay.

Here are the same calculations for 3 loan balances:

These are example monthly principal-and-interest repayments over 30 years, excluding fees and offset balances. Figures and changes are rounded separately, so subtracting displayed repayments can give a $1 difference. The cost of a 0.25-point rise is slightly higher at higher starting rates.

For a hypothetical 2-rise scenario, moving from 6.00% to 6.50% adds about $228 a month to the $700,000 example. Your lender decides which rate changes apply to your loan.

Use your balance, remaining term and current rate in our repayment calculator. Then test rates 0.25 and 0.50 percentage points higher. If your rate falls instead, ask whether you can keep the higher repayment to reduce the balance faster.

The table separates each bank’s view by its publication date. CBA’s update followed the 29 September RBA decision; Westpac’s 30 September assessment followed the CPI release. NAB's view also follows the decision. The ANZ entry is an earlier forecast.

The RBA increased rates on 29 September. The August CPI figures arrived the following day, so they were not a published result behind that decision. Westpac's post-release assessment kept a November increase as its base case. CBA's 29 September report expected a hold but identified another hike as a risk.

HSBC and AMP also expected more tightening in the reports dated below.

CBA forecasts 2 cuts, in August and November 2027, taking the cash rate to 4.10% by the end of 2027. In its 29 September Economic Insights report, senior economist Ashwin Clarke wrote that CBA expects “two rate cuts in late 2027”.

That forecast depends on slower growth bringing inflation down. CBA sees another November 2026 hike as a risk, while Westpac now treats one as its base case. HSBC’s earlier September-quarter 2027 cut forecast is shown in the table above.

For your loan, the useful question is whether repayments remain comfortable if relief comes later. A fixed rate generally stays unchanged during its fixed period, and a variable-rate cut depends on your lender.

A five-year outlook needs more than a single end rate. Bank forecasts cover the nearer years, while the RBA’s neutral-rate estimates help explain where rates might settle once inflation and employment are in balance. Neither tells you what a bank will charge on your mortgage in 2031.

What the published numbers cover

CBA’s September forecast gives an end-2027 cash-rate target of 4.10%. For 2028, the RBA’s August economic projections used a market-implied cash rate of about 4.4%. That assumption was finalised on 5 August, before the September hike. It shows what markets expected at that point, not a current RBA promise or a five-year forecast.

What “neutral” means

The neutral cash rate would neither speed up nor slow down the economy when inflation is at target and employment is in balance. In August, the RBA described the then 4.35% cash rate as being at the top of its range of central model estimates. Those estimates are uncertain and can move as investment, productivity and saving patterns change. Christopher Kent’s March 2026 speech explains why the RBA uses several models rather than one fixed number.

For 2029 to 2031, use a range of repayment outcomes rather than extend one bank’s 2027 number in a straight line. Inflation that stays high could keep rates up; weaker demand and easing inflation could create room for cuts.

How to read market pricing

Futures and overnight-indexed swaps show what traders are pricing, which can change quickly. They are different from a bank economist’s forecast. The ASX RBA Rate Tracker covers expectations for the next meeting; it is not a five-year mortgage-rate forecast. The table below shows the dated information available for each horizon.

I'd decide based on your budget, deposit and plans for the home. Waiting for a particular rate cut doesn't guarantee a cheaper purchase or an easier approval.

Before making an offer, write down these 3 numbers:

1. Your comfortable repayment. What can you pay while still covering living costs and saving for the unexpected? Check it at a higher rate too.
2. Your cash left after settlement. Allow for the deposit, buying costs and money you'll need after moving in.
3. Your checked borrowing limit. Ask your broker or lender to confirm what you can borrow under current rates and lending rules.

Waiting may give you time to save more or pay down debts. You'll also keep paying rent, and the property price or mortgage rate you face later could change. Buying sooner can give you housing certainty if the home and the costs fit your plans.

Possibly, but a national forecast can't tell you what a particular home is worth.

These are forecasts for the whole fall from the market peak, not an additional decline from today's prices. CBA reaffirmed its roughly 9% national peak-to-trough forecast on 1 October. Its expected recovery during 2027 depends on rate cuts next year. The AMP and HSBC entries above are earlier, dated forecasts.

Cotality's 1 October release put September's national dwelling-value fall at 1.1%, taking values 5.2% below the March peak. For a home you're considering, recent comparable sales and its condition matter more than a national percentage.

A higher mortgage rate can reduce the loan a bank will approve. Banks generally test repayments at least 3 percentage points above the actual rate, subject to their policies and permitted exceptions. A loan at 6.00% would therefore be tested at least 9.00%; you do not pay that assessment rate.

The change in your borrowing limit depends on your income, expenses, debts and lender. If rates or your circumstances have changed since pre-approval, ask for a fresh check before making an offer.

A competitive rate is one you can actually get for a loan that suits you. An advertised rate for a borrower with a much larger deposit may not be available in your situation.

For context, the RBA published these averages for new housing loans in July 2026:

These RBA housing-loan averages are for July 2026, before the 29 September rise, and include fixed and variable loans. For a current comparison, get written quotes using the same loan amount, deposit, repayment type and features.

Compare the interest rate and comparison rate, then check fees and offset access. Our home loan features guide explains what to look for.

Your deposit, credit history and loan details can change the rates available to you. Ask which pricing tier your application qualifies for before comparing it with a headline offer.

Your loan-to-value ratio, or LVR, is your loan divided by the value the lender accepts for the property. A $640,000 loan against an $800,000 valuation is an 80% LVR. You still need to allow for buying costs.

Some lenders offer a lower rate at a lower LVR. The thresholds and discounts vary, so check the actual offer and fees.

Lenders mortgage insurance, or LMI, is commonly relevant above 80% LVR. A government guarantee or eligible profession may change the result. Check the conditions in our LMI guide.

There isn't a credit score that guarantees everyone the same discount. Lenders also look at your repayments, debts, income and the property you're buying.

Check your credit report for errors before applying. Paying a debt doesn't automatically remove an accurate default, and a higher score doesn't guarantee a cheaper loan.

You can ask for a better deal now without waiting for an RBA cut. I'd start with your current lender, then compare that offer with suitable alternatives.

Compare the saving after switching costs, using the same remaining loan term. Restarting a 30-year term may lower your repayments but increase the total interest you pay. If your loan is fixed, get a break-cost quote before making a decision.

Suppose switching costs $2,000 and saves $150 a month after ongoing fees. It takes about 14 months to recover those costs on a simple cash-flow basis. That assumes the saving stays the same and doesn't compare the different paths for paying off your balance.

You could use this script:

“I'd like a pricing review on my home loan. My balance is [amount], my rate is [rate], and I've found a comparable offer at [rate] for my loan type and LVR. What's the best rate you can offer? Would any fees or loan features change?”

If your fixed period is ending, ask for the rate and repayment that will apply afterwards. Allow time to compare your options. A refinance still depends on the new lender's assessment, your equity and its valuation; a saving or approval isn't guaranteed.

See our refinancing guide for the steps involved.

Compare written offers. A fixed rate below a variable rate doesn't prove a cut is coming, and fixing doesn't guarantee the lowest total cost.

Compare the trade-offs in our fixed and variable home loan guide. For the basics of choosing a loan, see how to choose the right home loan.

The RBA cut 3 times in 2025, taking the cash rate from 4.35% to 3.60%. Four increases in 2026 brought it to 4.60% from 30 September. That reversal is a reason to leave room in your budget for more than one outcome.

The ABS release on 30 September put August's annual headline inflation at 4.0%, up from 3.5% in July. Annual trimmed mean inflation held at 3.6%. That underlying measure reduces the effect of unusually large price movements and remains above the RBA's 2% to 3% target range.

Housing and fuel costs contributed to the headline increase. Higher headline inflation alongside steady underlying inflation is a more useful description than treating every part of the economy as accelerating.

I'd keep room in the budget for rates to stay higher. The result doesn't set your mortgage rate or lock in the next RBA decision. The August ABS release is the source; the next CPI release is scheduled for 28 October.

CBA's Wage and Labour Insights: August 2026, prepared on 9 September 2026, uses its own salary-transaction data.

CBA’s Wage and Labour Insights report uses its own salary-transaction data. Hours worked and changes in the people receiving wages can affect these measures, so they differ from the official ABS jobs and wage series.

The report points to easing wage pressure alongside broadly steady employment. That helps explain the outlook, but does not settle whether inflation is low enough for cuts.

Could rates rise again in November?

Rates could go up again at the 3 November meeting. Westpac's 30 September view expects another rise, and ANZ's outlook reported on 22 September also pointed to a November rise. CBA's 29 September base case was a hold, with another rise a risk; NAB's earlier 27 August view also flagged that risk. These are dated forecasts, so I'd leave room for higher repayments without treating a rise as certain.

Inflation could stay higher if energy and freight costs flow through to more goods and services, or spending continues to outpace the economy’s capacity to supply them. Expectations also matter: people and businesses anticipating bigger price rises can change wage and pricing decisions.

Weaker spending or employment could ease pressure. The RBA weighs those developments together, which is why a forecast can change after new data.

Investors and home buyers face the same RBA decisions, but different budgets and loan prices. The RBA averages earlier in this guide don't mean every lender charges investors the same extra amount.

If you're investing, allow for vacancies, maintenance, insurance and management costs. Check the repayment if an interest-only period ends and you start paying down the loan as well.

If you're buying a home to live in, leave room for household expenses and the costs of owning the property. In either case, don't assume a rate cut will produce a set amount of growth in the property's value.

If you'd like help with the numbers, we can compare suitable loans, check your borrowing capacity and work through what a rate rise would mean for your repayments.

Bring your income details, deposit, debts and a realistic view of your living costs. That gives us something useful to work with when we look at your options.

Call 1300 088 065 or book a free assessment with Hunter Galloway.

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