The RBA cash rate stood at 3.85% per annum as of March 2026 — down from the peak of 4.35% following two cuts of 0.25% each in November 2024 and February 2025. The easing cycle has been slower and shallower than many borrowers hoped, reflecting the RBA's determination to return inflation sustainably to target before easing policy more aggressively. This analysis examines what the major forecasters expect for the remainder of 2026 and how borrowers should respond.
The Current Cash Rate Position and Rate Cycle Context
The RBA's cash rate at 3.85% represents the current equilibrium point in Australia's post-pandemic monetary policy adjustment. The hiking cycle (May 2022 to November 2023) raised rates from 0.10% to 4.35% — an increase of 4.25% in 18 months. The subsequent cutting cycle has been far more gradual: two cuts of 0.25% each, returning the rate to 3.85%.
For context, the neutral rate — the rate at which monetary policy is neither stimulatory nor restrictive — is generally estimated by RBA economists at approximately 2.5–3.0% for Australia. At 3.85%, policy remains mildly restrictive. This provides room for further cuts, but the RBA's caution reflects residual uncertainty about services inflation and global conditions.
What Major Forecasters Are Predicting for the Cash Rate in 2026
Major Australian bank economists as of March 2026: CBA forecasts a further 0.25% cut in May 2026 and a final cut in H2 2026, bringing the cash rate to 3.35% by end-2026. Westpac projects two more cuts in 2026, ending at 3.35%. ANZ and NAB have a more cautious view — one more cut in 2026, finishing at 3.60%. ASX cash rate futures implied approximately a 60% probability of a May 2026 cut and 75% probability of at least one cut by September 2026.
The key uncertainty is the Q1 2026 inflation data, due for release in late April. If CPI confirms the disinflation trend, a May cut appears highly probable. If inflation proves stickier than expected — particularly in services (housing, insurance, education) — the RBA may delay further easing into H2 2026 or beyond.
| Forecaster | Next Cut Timing | End-2026 Cash Rate | Total 2026 Cuts |
|---|---|---|---|
| CBA | May 2026 | 3.35% | 2 × 0.25% |
| Westpac | May 2026 | 3.35% | 2 × 0.25% |
| ANZ | H2 2026 | 3.60% | 1 × 0.25% |
| NAB | June 2026 | 3.35% | 2 × 0.25% |
| ASX Futures (Mar 2026) | May 2026 (60%) | ~3.40% implied | ~1.5 cuts priced |
How to Position Your Home Loan Given the 2026 Rate Outlook
Given the consensus for one to two further modest cuts in 2026, here is how to think about your loan structure. For variable rate borrowers: staying variable in a falling rate environment means your rate should reduce with each RBA cut. The key is ensuring you are on a competitive variable rate — not a back-book rate that lenders may not move as aggressively as headline rate cuts.
For those considering fixing: two-year fixed rates from competitive lenders range from approximately 5.5% to 6.0% as of March 2026. If the consensus forecasts are correct (two more 0.25% cuts bringing variable rates to approximately 5.4–5.6% for competitive loans by end-2026), fixing at 5.7%+ for two years locks in a rate similar to or above where variable rates may be in 12–18 months. A split loan — keeping half variable to benefit from cuts, fixing half for certainty — balances both scenarios.
Review Your Mortgage Now — Not When Rates Change
The best time to review your home loan is before rates move — not after. If your rate is competitive now, you are well positioned. If you are paying a loyalty rate above the market, refinancing now captures the benefit of current competitive rates plus any future cuts. Do not wait for the RBA to cut — the loyalty tax is happening regardless.
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About the Author
Sakib Manzoor
Senior Finance Wellness Expert
Sakib Manzoor is the founder of Secure Finance and brings extensive experience in Australian mortgage broking and financial wellness. Specialising in helping clients achieve their property finance goals through personalised strategies and expert guidance, Sakib is FBAA accredited and committed to providing clear, actionable advice. All content is written to meet Australian regulatory standards and is regularly updated to reflect current market conditions.