The debate over interest rates continues to cast a shadow over Australia's financial markets.
Earlier this month, the Reserve Bank of Australia (RBA) lifted the official cash rate (OCR) to 3.85%, putting extra pressure on mortgage holders and investors nationwide.
On Tuesday, the central bank released the minutes from the February 2 and 3 meeting, revealing that board members debated heavily whether monetary policy was restrictive enough to curb inflation. They pointed to a sharp rise in investor-driven housing credit and a surge in business borrowing — growing at its fastest pace since the Global Financial Crisis and outstripping overall economic growth — as signs that inflationary pressures may prove persistent.
Major banks were quick to offer their analysis. National Australia Bank (NAB) and Westpac said the RBA would likely hold rates at its March meeting, but raise rates in May, while ANZ said the bank will likely hold for the remainder of the year. Commonwealth Bank of Australia (CBA), meanwhile, said the RBA's next move will be dependent on the latest data.
But forecasts from major banks are one thing. Australian Broker went straight to mortgage brokers on the ground for their thoughts.
The following excerpts have been edited for grammar and clarity.
Managing Director and finance specialist at Newcastle-based Money Links
"From where I sit, another rate increase is still very much on the table, even if some forecasters are starting to argue the RBA may be close to done. The challenge is that inflation isn’t being driven only by household demand anymore. Persistent and excessive government spending and structural cost pressures are keeping underlying inflation higher for longer. That puts the RBA in a difficult position. The economy is clearly slowing, and conditions are likely to deteriorate further over this year. But if inflation doesn’t continue easing in a convincing way, the RBA may feel it has little choice but to tighten again, even into a weakening economic environment.
"If we do see another hike, my view is that May is the most likely window. By then the RBA will have fresh quarterly inflation data and a clearer read on whether the current policy stance is doing enough to bring inflation back to target. So, while I don’t think a hike is guaranteed, I do think it remains a real possibility and the RBA’s next move will ultimately depend on whether inflation proves more stubborn."
"I think another rate hike is likely. Inflation is still materially above the RBA’s 2% to3% [target] band, and forecasts suggest it could push back above 4% later this year; that’s well outside their comfort zone. The RBA has been clear that getting inflation under control is the priority.
"Historically, the RBA doesn't tend to hike just once in a rate rising phase. If inflation proves sticky, I wouldn’t be surprised to see a move in May, or later this year. Borrowers should be planning for rates to stay higher for longer, not banking on cuts anytime soon."
New South Wales-based mortgage broker at Home Loan Village
"Certainly at this stage it appears we will have another rate increase. However, in the current climate it is actually really hard to tell. Will we see the economic indicators that have represented strong growth start to soften and then decrease the likelihood of rate increases in May? Potentially. But at the same time, we may see sustained inflation in the face of weaker economic growth too.
"I think the rate rise potential for May will decrease over the coming months and we will see it increase later in the year instead. However, if the RBA is on the fence, they may very well increase the rates to ensure that inflation doesn’t get out of hand. The most important thing is that the RBA maintains as much independence as possible. If this is diminished over coming years then this will undoubtedly lead to bad economic outcomes."
Franchise owner and broker at Adelaide-based Mortgage Choice, Morphett Vale
"I'm fairly sure there will be another rate rise at the next meeting. Given all the latest figures released, I think it’s a pretty good chance unfortunately."
Founder, director and broker at Perth-based brokerage Beez Neez Finance
"Yes, I think one more rate hike is coming, probably mid year."
Cofounder and managing director at commercial finance brokerage Simplicity Loans & Advisory
"The RBA’s recent move to 3.85% aims to tame inflation. But it places a heavy burden on the average Joe already battling rising living costs. This pressure extends deep into the commercial sector too. For our developer clients, interest is one of the largest costs within their industry. It is a fundamental cost of business that is already a struggle in an overstretched market. Ultimately, while we need stability, these hikes act as a significant handbrake on the housing and infrastructure projects our economy desperately needs."
Founder and managing director at Melbourne-based Empower Wealth
"Yes, I think May will see another rate rise for several reasons. First, in May, the RBA will have seen the first quarter CPI inflation print. Also, historically, one and done hasn't been a method adopted by the RBA board. They need to pump the brakes [on inflation] harder to have an impact.
"The other significant clue came from the RBA's latest statement on monetary policy forecast, which was also released during the RBA February board meeting. After initially forecasting dwelling investment growing at 3.7%, the latest forecast has dwelling investment only growing at 0.3%. Dwelling investment is highly sensitive to interest rates. So they are giving us a big clue here that at least one extra interest rate is coming."
Director and broker at Melbourne-based Australian Property Home Loans
"Unfortunately, I do think we may be in for another increase, in May or June. And the only reason I say this is because it was about two rate drops ago that inflation started tipping the other way, on an upward trajectory. We have solid unemployment figures as well, which is likely to further underpin a rate increase.
"However, I would also like to hope that they wait until August before they decide on making any more moves. The recent hike is obviously related to a lag effect of spending as a result of the recent decreases we experienced; confidence has gradually improved and spending has increased. There is a lot of government spending in those figures as well. If the RBA can just wait a few more months to see what the lag effect is of the February increase, it might just be enough."
Founder of Melbourne-based brokerage Own Home Loans
"The RBA's February move to lift the cash rate to 3.85% shows they’re not yet comfortable declaring victory on inflation. Their latest forecasts suggest inflation will take time to settle back into the 2% to 3% target range. So another increase can’t be ruled out. If upcoming inflation data shows underlying price pressures aren’t easing fast enough, then a further 0.25% rise in May is certainly possible. But it’s not automatic. The RBA has been clear it will respond to the data, not market headlines.
"From what we’re seeing on the ground, a lot of borrowers have adjusted to a higher-rate environment. Households are more focused on cash flow, building buffers in offset accounts and structuring their loans sensibly. Unfortunately, some borrowers are still struggling and they would feel further pressure if rates rise again. In 2026, the bigger risk isn’t a sharp spike in rates. Its rates staying higher for longer. Planning for that scenario is far more powerful than trying to out-predict the Reserve Bank."
Founder and director of Brisbane-based Emerge Finance
"I think there will be another rate increase. Michele Bullock, the RBA governor, already confirmed it really by saying that the interest rate increases, or the RBA increases, aren't having as much effect on reducing inflation as it previously was thought. And interest rates are really the RBA’s only measure to try and impact inflation.
"We're seeing a lot of our clients, who are obviously mortgage holders, where cash flow is being strained by the increases. But a lot of the older clients who might not have mortgages or are retirees, they're actually making more money through deposits, because of higher interest rates. So I don't know if the inflation is coming down as much as the RBA is expecting. Because all of those clients without mortgages are potentially spending more.
"The RBA will likely wait and see what happens with the inflation data in the next couple of months. Because right now, coming off the back of Christmas, everyone was spending a lot and going on holidays. And then typically the first few months of the year, everyone's cutting back, because they've probably spent too much for the holiday period. So I think they'll probably wait till the May meeting before raising rates."
Founder and director of Perth-based Focused on Finance
"Based on the latest notes from the RBA, I think a rate increase in May is looking very likely. The RBA has consistently shown that the only lever they know how to pull is a rate increase when trying to control inflation.
"My messaging to my clients remains the same though: focus on what you can control. Make sure you control your finances and know your numbers. Most of the time when I help clients properly look at their budgets, they realise that rates could go up 2% to 3% and they will still be ok."
Cofounder of Melbourne-based Clue Finance
"We tend to agree with the majority of lenders who anticipate additional rate hikes this year, although this will rest largely on what CPI results tell us about household spending and unemployment. If the cash rate were to increase this May, the property market as a whole would remain largely unaffected due to the strength of our labour markets, high migration levels, sustained credit availability and ongoing property supply shortages. However, home buyers and existing mortgage holders could see some reduction in borrowing capacity due to a rate hike.
"On the commercial side, higher interest rates could affect borrowing capacity, as these expenses are generally offset against rental yield, potentially reducing interest coverage ratios. Having access to a wide lender panel could support commercial borrowers in accessing the right loan for them."
Director and finance broker at Flint Group Brisbane
"With the shift in recent data, market expectations have clearly changed and the major banks now forecasting another rate hike in May is definitely a realistic scenario. The key driver will be the next inflation read. If inflation remains sticky or comes in higher than expected, the RBA will likely feel it has justification to tighten again.
"From my perspective, another increase around the May meeting is certainly possible. But it's far from guaranteed. The RBA will also be very conscious of the impact rate rises have already had on household budgets and mortgage holders. So they’ll be trying to strike a balance between getting inflation under control and not over-tightening the economy.
"If we do see another 25 basis point rise, it will add further pressure to borrowers already adjusting to higher repayments. But it may also push more people to review their loan structure, refinance or look at strategies, such as offsets and split loans, to manage cash flow."
