Will Home Loan Interest Rates Go Down? September 2026 Forecast

None of the Big 4 banks in the forecast table below expects a cut as the RBA's next move. NAB expects a rise in September. CBA, ANZ and Westpac expect November. Each expects that next rise to take the cash rate to 4.60%.

The RBA hasn't made that decision. It will weigh up inflation and the economy at its next meeting, and the forecasts can change before then.

There's also a difference between the cash rate and your home loan rate. The RBA sets the cash rate; your lender sets your mortgage rate. Your repayments then depend on that mortgage rate, your balance, your loan type and how long you have left to pay it off.

The cash rate is one influence on mortgage pricing. Lenders can change their rates independently, and an RBA change does not guarantee the same change to your loan.

On a $700,000 loan, a rise from 6.00% to 6.25% would add about $113 a month, assuming principal-and-interest repayments and 30 years remaining. That's the kind of number I'd put into your budget before worrying about which bank has the best forecast.

Here are the same calculations for 3 loan balances:

Monthly principal-and-interest repayments with 30 years remaining. These are examples, not advertised rates or predictions. They assume no fees or offset balance. Each repayment and change is calculated separately and rounded to the nearest dollar, so subtracting the displayed figures can give a $1 difference.

Same loan balance and term in each example. At 5.75%, the repayment is about $112 less a month than at 6.00%; at 6.25%, it is about $113 more. Actual lender calculations can differ.

For the $900,000 example, a cut from 6.00% to 5.75% saves about $144 a month. A rise to 6.25% adds about $146. The changes aren't exactly equal because of how principal-and-interest repayments work.

Try this with your own numbers: Put your balance, remaining term and quoted rate into our repayment calculator. Check the repayment at your quoted rate, then at 0.25% and 0.5% higher. These are budget tests, not forecasts.

If your rate falls, check what happens to your direct debit. Your lender may reduce the minimum repayment, or you may be able to keep paying the same amount and pay off more of the loan.

The main disagreement is when the next rise happens and whether one will be enough. These forecasts are for the RBA cash rate, not the rate a lender will offer you.

HSBC expects more tightening than the Big 4's next-move forecasts. AMP's Shane Oliver also expects a rise, but puts more weight on the risk of pushing the economy too hard.

Some forecasts include cuts in 2027, but there is no dependable date when your mortgage will get cheaper. The outlook depends on inflation, jobs and spending, as well as your lender's pricing.

CBA's report dated 8 September forecasts a further rise to 4.60%, then 2 cuts totalling 0.5% in 2027. That would bring the cash rate to 4.10%. It also says the risks favour no cuts in 2027. Both parts of that forecast matter.

Source: CBA, The CommBank View: Higher rates, harder choices, 8 September 2026, pages 3-4. Its public September overview explains the near-term rise.

Westpac's 8 September forecast has cuts starting in August 2027, with the cash rate at 4.10% by the end of 2027 and 3.85% by the end of 2028. HSBC's 2 September comments put the start of cuts in the September quarter of 2027, after a higher expected peak. Westpac forecast · HSBC comments reported by ABC

If you're on a fixed loan, a cash-rate cut generally won't change your repayment during the fixed period. With a variable loan, check your lender's announcement and when any change takes effect.

I wouldn't use a forecast for 2029 or 2030 to set your budget today. The further out the forecast, the more can change before you get there.

You may hear economists talk about a “neutral” cash rate. That's an estimate of a rate that neither speeds up nor slows down the economy. It's not a promised destination, and it can change.

For a loan you may hold for decades, allow for rates to rise, fall or stay much the same. Nobody can promise that pandemic-era mortgage rates will return, or rule it out for all time.

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 figures describe the expected whole decline from the market peak. They are not forecasts for another fall of that size from today's prices. Oliver's housing outlook · HSBC comments reported by ABC

I'd look at recent sales near the home you're considering, its condition and how long you plan to live there. A small rate saving won't make an unsuitable property a good purchase.

A rate rise can reduce the amount a bank will lend you, even if you can manage the extra monthly repayment.

Banks generally test whether you can repay at least 3% above the actual rate, subject to their rules and permitted exceptions. On an example loan at 6.00%, that means an assessment rate of at least 9.00%. You don't pay that assessment rate; the lender uses it to check affordability. APRA's May 2026 settings

A rate rise won't reduce everyone's borrowing power by the same amount. Your income, debts and lender's rules all matter.

If you already have pre-approval, ask for an updated check before making an offer when rates or your circumstances change. Don't assume the old limit still applies.

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:

Source: RBA lenders' interest rates, July 2026 data displayed when checked on 11 September 2026. These averages include fixed and variable loans. They aren't current offers, comparison rates or the lowest rates available.

I'd compare written quotes using the same loan amount, deposit, repayment type and features. Check the interest rate and comparison rate, then look at fees, offset access and any conditions attached to an introductory offer. Moneysmart: choosing a home loan

A lower headline rate can still leave you paying more if the loan has extra fees or features you don't need. Our home loan features guide explains what to compare.

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. Moneysmart: credit reports

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. Moneysmart: switching loans

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. Moneysmart: home loan choices

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.

Rates can change direction while you're still searching for a property. That is why I'd leave some room in your budget rather than plan around one forecast.

The RBA cut the cash rate 3 times in 2025, from 4.35% to 3.60%. Increases in February, March and May 2026 took it back to 4.35%. The RBA then held in June and August. RBA cash-rate history

That history doesn't tell us the next move. It shows how quickly an outlook can change.

Inflation had eased, but it was still above the RBA's 2-3% target range in the July figures.

The Australian Bureau of Statistics (ABS) reported annual headline inflation of 3.5% in July 2026, down from 3.8% in June. Annual trimmed mean inflation, which reduces the effect of unusually large price changes, was 3.6%. The figures were released on 26 August 2026. ABS July CPI

One lower headline number doesn't establish that inflation is under control. In its August decision, the RBA said it remained alert to inflation risks and could raise rates again if needed. RBA August decision

CBA's Wage and Labour Insights: August 2026, prepared on 9 September 2026, gives a newer reading from its own salary-transaction data.

Source: CBA, Wage and Labour Insights: August 2026, prepared 9 September 2026, pages 2-3 and 6. These private indicators are not the official August ABS jobs result. Hours worked and changes in the workforce mix can affect the measures; the report explains this on pages 7-8.

My reading is that wage pressure has eased from earlier peaks, while the jobs indicator is broadly steady. That's useful context, but it doesn't establish that inflation is low enough for a cut.

Inflation staying too high is the main risk to the prospect of cuts. Several things could keep pressure on prices:

• Price rises that persist: A lower headline figure can hide pressure in other parts of the economy.
• Energy and supply costs: Businesses may pass higher fuel, freight or other costs on to customers.
• Demand running ahead of supply: Spending and investment can push up prices when workers, materials or capacity are limited.
• Expectations of higher inflation: Those expectations can feed into wage and price decisions.

CBA and Westpac discuss these risks in their September outlooks. Weaker spending or jobs growth could ease pressure, but no single indicator guarantees a cut. CBA September outlook · Westpac forecast

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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