Major lenders move ahead of updated forecasts on RBA cash rate
NAB, Australia’s third-largest residential lender, has increased fixed rates on its Tailored home loan range, underscoring growing expectations that interest rates will climb heading into 2026.
The change was implemented ahead of revised forecasts from economists at both Commonwealth Bank (CommBank) and NAB, who have now shifted to project an increase in the Reserve Bank of Australia (RBA) cash rate in February.
NAB’s new headline fixed rate for owner-occupier borrowers is 5.39% p.a. with a comparison rate of 6.16% p.a., available on two-year fixed loans for customers with deposits of at least 20% and making principal and interest repayments.
The move brings NAB into line with other major banks that have already repriced fixed products. Westpac has lifted its fixed rates twice in recent weeks – once in November and again last week – while Macquarie also raised fixed rates in November.
Macquarie’s increase removed its sub-5% fixed home loan offering, and CommBank ended its 4.99% p.a. fixed rate special soon after.
Sub-5% home loan rates are now largely confined to smaller lenders and mutuals, and are typically found in selected variable products, including offers targeted at first home buyers or essential workers.
NAB’s decision to raise fixed mortgage rates follows a lift in its term deposit rates the previous day, adding to indications that banks are positioning for higher funding costs and a possible near-term cash rate rise.
Lenders commonly increase term deposit rates to attract more stable deposit funding when they expect wholesale funding costs to rise in an interest rate upcycle.
Soon after NAB repriced its fixed rates on Tuesday, economists at CommBank, Australia’s largest home lender, updated their outlook to forecast a 0.25 percentage point cash rate increase at the next RBA meeting in February.
NAB’s economics team then followed with a similar projection, anticipating a 0.25 percentage point rise in February and a further 0.25 percentage point increase in May. On this scenario, the cash rate would reach 4.10%, up from the current level of 3.60%.
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