A growing chorus of bank economists is warning Australian mortgage holders that the Reserve Bank's tightening cycle is not yet finished, with several major-bank chief economists now openly forecasting further cash rate increases in coming months and urging borrowers to take a hard look at their loans before the next move.
Westpac Group chief economist Luci Ellis is among the most explicit. She expects the RBA to push the cash rate to 4.85 per cent by mid-August, a level that would mark a multi-year peak and squeeze variable-rate borrowers further. HSBC chief economist Paul Bloxham is also penciling in another move, but framed his outlook around how quickly inflation pressure feeds through to the labour market.
The next hike will depend, Bloxham said, on "how quickly the economy is weakening and, critically, on whether there are signs that this is feeding through to significant weakening in the jobs market."
For Wealth Within chief analyst Dale Gillham, the conclusion for households is more direct. He expects "at least two" interest rate rises this year and argued that prudent borrowers should already be adjusting behaviour. "People may as well save some money," Gillham said, framing rate-hike preparation as a matter of household financial hygiene rather than crystal-ball forecasting.
That advice has translated into a noticeable bump in inquiries about fixed rates, with brokers reporting more clients running the numbers on whether to lock in part or all of their loan ahead of further RBA action. But Canstar spokesperson Sally Tindall warned that the fixed-rate decision is not as simple as it looks, particularly with the cycle now extended.
"If you fix your rate now, it protects you from future cash rate hikes, but it also counts you out of any cash rate cuts," Tindall said.
The trap on the other side of the trade, break costs, was flagged in similarly stark terms by Dominic Beattie, editor of comparison site savings.com.au. Borrowers who lock in fixed rates and then need to refinance or sell can face very large penalty fees if they exit the loan early, particularly on longer fixed terms.
"You won't be able to refinance or exit the loan within that period without copping pretty high break costs," Beattie said.
The broader message from the coalition of economists and consumer experts is that the do-nothing option is increasingly the most expensive one. Variable-rate borrowers have absorbed two RBA hikes already in 2026, and several major lenders, including Westpac itself, have lifted fixed rates twice in the space of three weeks even without the RBA moving, with starting fixed rates pushing toward 6.29 per cent on certain terms.
For mortgage holders, the action items emerging from the commentary are practical rather than panic-driven: review the actual rate being paid on the existing loan, compare against current market offers, and decide whether the certainty of a fixed rate is worth the optionality cost of missing future cuts. Households on rates well above market should be hardest in the firing line for refinance opportunities.
The policy backdrop is unlikely to ease the pressure soon. With Westpac and HSBC pointing to higher peaks, and bank economists at second-tier lenders such as Bendigo Bank tipping an August rate move, the mortgage market is being priced for a longer plateau at restrictive levels. The borrowers who do best in that environment, the experts argue, will be the ones who stop watching headlines and start working their own loan documents.