CommBank and NAB have both changed their tune on Tuesday, forecasting the RBA to hike the cash rate when the board meets in early February.
If hike were to occur, it would be the first time the cash rate has been lifted since 2023 and end the rate-cutting cycle that began in early 2025.
"A modest rate cutting cycle helped improve economic activity," CommBank head of Australian economics Belinda Allen said on Tuesday.
"But with an economy rapidly reaching - and perhaps already breaching - its speed limit, inflationary pressures have emerged."
The big bank also believes the RBA appears to be more reactive to a quickening economy than it previously anticipated.
Those assumptions combined have led the bank to tip a 25 basis point hike in February, bringing the cash rate to 3.85%, where it's expected to remain for some time.
NAB economists have gone one further, predicting 25 basis point rate hikes in February and May, boosting the cash rate back to 4.10%.
The bank expects trimmed mean inflation to rise 0.9% over the three months ending December, which would beat the RBA's forecasts by 15 basis points.
"If realised, this will imply a period of five quarters in which the annual rate of core inflation runs at 3% or higher," NAB chief economist Sally Auld said.
"We believe an inflation outcome of this magnitude will force the RBA to execute a modest recalibration of monetary policy in [the first half of 2026]."
RBA governor Michele Bullock told media the central bank board did not consider cutting the cash rate at its December meeting last week, indicating further rate cuts likely won't be needed.
Prior to revealing its about-face, NAB became the latest major bank to lift rates on offer to those fixing their home loans, hiking by as much as 20 basis points on Tuesday morning.
Where banks set advertised fixed rates is often considered a proxy for what they expect of the cash rate over the coming months and years.
Both Westpac and Macquarie Bank have lifted fixed home loan rates twice in recent weeks, while CommBank put its sub-5% p.a. special fixed rate offer to bed in late November.
ANZ economists forecast the cash rate to remain on ice but note they see a risk of a hike early next year, while Westpac experts continue to anticipate two cuts in mid-2026.
NAB lifts fixed rates by up to 20 basis points
Following the latest changes, NAB's lowest fixed rate home loan offering is now 5.39% p.a. (comparison rates* from 6.00% p.a. to 6.24% p.a.).
That rate is available on its Tailored Fixed product for owner-occupiers with loan-to-value ratios (LVRs) of 80% or less, fixing for one or two years.
NAB hikes fixed rates for owner-occupier mortgages
The latest changes to owner-occupier, principal and interest fixed rates from NAB include:
| Fixed period | LVR | Change | New rate | Comp rate* |
|---|---|---|---|---|
| One year | ≤70% | +10bp | 5.39% | 6.06% |
| 70-80% | +10bp | 5.39% | 6.24% | |
| >80% | +10bp | 5.49% | 6.25% | |
| Two years | ≤70% | +20bp | 5.39% | 6.00% |
| 70-80% | +20bp | 5.39% | 6.16% | |
| >80% | +20bp | 5.49% | 6.18% | |
| Three years | ≤70% | +15bp | 5.44% | 5.96% |
| 70-80% | +15bp | 5.44% | 6.10% | |
| >80% | +15bp | 5.54% | 6.13% | |
| Four years | ≤70% | +10bp | 5.79% | 6.04% |
| 70-80% | +10bp | 5.79% | 6.16% | |
| Five years | ≤70% | +10bp | 5.79% | 6.02% |
| 70-80% | +10bp | 5.79% | 6.13% | |
| >80% | +10bp | 5.89% | 6.17% |
NAB hikes fixed rates for investor mortgages
The latest changes to investor fixed rates from NAB include:
| Fixed period | Interest type | LVR | Change | New rate | Comp rate* |
|---|---|---|---|---|---|
| One year | P&I | ≤70% | +5bp | 5.49% | 6.34% |
| 70-80% | +5bp | 5.49% | 6.52% | ||
| >80% | +5bp | 5.59% | 6.53% | ||
| IO | ≤70% | +5bp | 5.59% | 6.41% | |
| 70-80% | +5bp | 5.59% | 6.59% | ||
| >80% | +5bp | 5.69% | 6.60% | ||
| Two years | P&I | ≤70% | +20bp | 5.54% | 6.27% |
| 70-80% | +20bp | 5.54% | 6.43% | ||
| >80% | +20bp | 5.64% | 6.45% | ||
| IO | ≤70% | +20bp | 5.64% | 6.34% | |
| 70-80% | +20bp | 5.64% | 6.50% | ||
| >80% | +20bp | 5.74% | 6.52% | ||
| Three years | P&I | ≤70% | +10bp | 5.59% | 6.21% |
| 70-80% | +10bp | 5.59% | 6.36% | ||
| >80% | +10bp | 5.69% | 6.38% | ||
| IO | ≤70% | +10bp | 5.69% | 6.28% | |
| 70-80% | +10bp | 5.69% | 6.42% | ||
| >80% | +10bp | 5.79% | 6.45% |
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Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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