Will the Reserve Bank’s next move on rates be up, down or another hold?
Economists are sharply divided over the direction of the cash rate into 2026, with new survey data showing no clear consensus on whether the next move will be up or down.
Finder’s latest RBA Cash Rate Survey asked 35 economists and market specialists on the interest rate outlook and broader economic conditions. While every panellist correctly anticipated no change to the cash rate at the Reserve Bank of Australia’s final meeting of 2025, their views diverge markedly beyond the near term.
Almost one in three respondents (29%) expect at least one increase in the cash rate over the next 12 months, while an identical share (29%) anticipate at least one cut. The remainder foresee a prolonged period of stability. For mortgage brokers, this split highlights the difficulty of providing clear guidance on rate expectations to clients planning for 2026 and beyond.
Bond market pricing adds another layer of uncertainty. While a segment of the expert panel is bracing for a move within a year, ASX bond traders are currently factoring in a cash rate rise by November 2026, implying a longer pause before any tightening. The gap between expert forecasts and market pricing suggests a wide range of possible rate paths over the next two years.
Graham Cooke (pictured right), head of consumer research at Finder, said the shift in sentiment among commentators has been rapid. “Just a few months ago, another rate cut looked within reach,” he pointed out. “Now, we have the most divided panel I’ve seen in years. Nobody knows which way the RBA will go next.”
As such, Cooke advised borrowers to tread carefully over the festive period. “You don’t want to go into the New Year with a Christmas debt hangover, especially when your mortgage could be getting more expensive,” he added.
“If you haven’t reviewed your home loan in a while, now’s the time. Refinancing to a lower rate or negotiating a better deal with your lender could save you thousands of dollars.”
According to Finder’s analysis, a borrower with a $600,000 mortgage on an average variable rate could reduce repayments by $4,079 over 12 months by moving to the lowest available one-year fixed rate, on the assumption that the cash rate remains unchanged over that period. The calculation is based on a shift from an average variable rate of 5.52% to a one-year fixed rate of 4.84%.
For advisers and brokers, the key issue is how to manage clients’ risk in a highly uncertain rate environment. The split in expert opinion and the market’s longer-dated pricing mean that any rate strategy for 2026 carries trade-offs. Shorter-term fixed rates may offer temporary savings and budget certainty, but also expose borrowers to break costs or the risk of being locked into higher rates if variable pricing falls. Remaining variable, meanwhile, leaves borrowers fully exposed to any earlier-than-expected hikes.
Cooke said decisions on whether to lock in rates should be grounded in each borrower’s financial position and tolerance for uncertainty. “If you are really struggling and need the certainty of set repayments to manage your budget, fixed rates can provide that emotional security and certainty,” he explained.
“Trying to ‘beat the bank’ by fixing your rate is often a losing gamble because banks are experts at pricing in future rate movements. If variable rates do drop, you could be stuck paying a higher fixed rate or face a penalty of thousands of dollars to get out. No matter whether you go fixed or variable, make sure you are on the best rate possible.”
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