Homeowners, brace yourselves! The cost of your mortgage is about to get even more expensive, and it’s all thanks to a series of moves by major banks in anticipation of rising interest rates. But here’s where it gets controversial: while some banks are already hiking their fixed rates, others are holding steady, leaving borrowers to wonder who’s making the right call. Let’s break it down.
Commonwealth Bank (CBA) has taken a bold step by increasing interest rates on its fixed home loans, a move directly tied to the Reserve Bank of Australia’s (RBA) expected decision to raise the cash rate in early 2026. This comes after inflation ended last year on an upward trend, following a series of rate cuts. CBA predicts the cash rate will climb to 3.85% by year-end, a forecast that’s already shaking up the mortgage market.
And this is the part most people miss: CBA’s fixed rates for both owner-occupiers and investors have surged, with three-year fixed rates seeing the biggest jump. For owner-occupiers, these rates have risen by 0.7% to 6.19%, while investors face a 0.6% increase to 6.24%. Even the lowest fixed rate at CBA—a two-year loan for owner-occupiers—has climbed by 0.35% to 5.94%. Compare this to Westpac’s 5.59% and ANZ’s 5.44% for similar loans, and it’s clear CBA is now one of the pricier options.
These changes kick in from January 15 and apply to both new and existing customers switching to or applying for a fixed-rate home loan. But CBA isn’t alone in its predictions. Canstar highlights NRMA Insurance as offering the cheapest two-year fixed home loan at 5.29% for a $500,000 mortgage, with Suncorp and NAB close behind at 5.39%.
Here’s the kicker: Banks aren’t the only ones forecasting rate hikes. Canstar’s data insights director, Sally Tindall, says it’s not a matter of if rates will rise, but when and by how much. While inflation is moving in the right direction, trimmed mean inflation has remained at or above 3% for five straight months. This suggests the current cash rate might not be enough to hit the RBA’s 2.5% target. Much hinges on the next quarterly inflation figures, due just six days before the RBA’s next rate decision.
NAB predicts a 0.25% cash rate increase in February and another in May, while Westpac and ANZ expect rates to hold steady in 2026. For context, a 0.25% hike means an extra $90 per month for an owner-occupier with a $600,000 mortgage over 25 years. The RBA’s next meeting on February 3 at 2:30 PM will be a pivotal moment for borrowers.
Now, here’s the controversial question: Are banks like CBA being proactive or overly cautious? And with some lenders offering lower rates, should borrowers lock in now or wait and see? Let us know your thoughts in the comments—this is a debate that’s far from over.
