Rates Could Reach 5% by Mid-2027: Australian Banks Warn of Higher Interest Rates

Australia's interest rates could approach 5% as major banks warn that relief remains a long way off. The Reserve Bank of Australia's cash rate is currently at 4.35%, following three increases since the beginning of 2026.

The RBA left the rate unchanged at its August meeting but made clear that inflation remained too high and further increases were possible. ANZ Research analysis suggests markets have been pricing a possible cash-rate peak of about 4.99% by mid-2027.

The big four banks - NAB, Commonwealth Bank, Westpac, and ANZ - are forecasting another increase in interest rates within the next few weeks or months, with some expecting a rate rise as early as September.