- The RBA Board hikes the cash rate to 4.10% at its March meeting.
- Days before the announcement, all Big Four banks forecast a 25-basis point cash rate increase, citing inflationary risks posed by the ongoing conflict in the Middle East.
- NAB was the first to announce a 0.25% p.a. increase to its variable home loan rates, effective 27 March.
- CBA and ANZ will also raise variable-rate home loans by 0.25% p.a., starting 27 March.
- Westpac will apply a 0.25% p.a. increase to its variable-rate home loans starting 31 March.
In the lead-up to the Board’s March meeting, economists across the major banks had all shifted their forecast toward a 25 basis point increase to the benchmark rate .
Westpac and NAB were the first two to back a cash rate hike, citing renewed inflationary pressures from higher oil prices fueled by the ongoing conflict in the Middle East.
CBA and ANZ quickly joined their big four peers in expecting an increase to the cash rate amid geopolitical uncertainty.
The RBA Board, in its post-meeting statement, confirmed what the market had predicted would drive the policy-setting committee to once again lift the cash rate.
The Board said:
“The conflict in the Middle East has resulted in sharply higher fuel prices, which if sustained, will add to inflation.”
The RBA also acknowledged this anticipated surge would compound the upward trend already seen in short-term inflation indicators.
“As a result, the Board judged that there is material risk that inflation will remain above target for longer than previously anticipated.”
Tuesday’s decision was split, with five members of the Board voting to increase while four elected to leave it unchanged at 3.85%.
Expectations had been firming for days, and by the eve of Tuesday’s announcement, 58% of market watchers accurately predicted the Board’s move.
The economic teams across the major banks all noted the inflationary risks of the war, further exacerbated by recent oil price shocks and the expected impact on energy and other linked goods prices.
Following today’s widely anticipated hike, all big four banks are also expecting another 25bps increase in May, bringing the cash rate back up to 4.35%, where it stayed until February 2025.
This comes on top of the 25bps hike just a month ago.
A May 2026 cash rate hike would effectively wipe out the three interest rate cuts in 2025.
NAB
NAB was the first among the four major banks to fire, announcing a 0.25% p.a. increase to its variable home loan rates.
The rate hike will be effective from 27 March.
In a statement, NAB Personal Banking group executive Ana Marinkovic said the bank recognised the ongoing pressure higher interest rates placed on households.
“We know another rate increase will be challenging for many Australians, particularly in the context of ongoing cost-of-living pressures,” Ms Marinkovic said.
For context, a 25‑basis‑point increase will add roughly $120 a month to repayments on an average $736,000 home loan.
According to Ms Marinkovic, NAB home loan customers who paid more than the minimum repayments were able to build buffers.
The bank executive admitted, however, that it “won’t be the case for everyone”.
As such, borrowers who may be feeling under pressure and may need to make changes to their repayments following the latest rate hike are encouraged to reach out to the bank early.
“There are options available, and our bankers are here to help customers understand what support might be right for them,” Ms Marinkovic said.
Customers experiencing financial difficulty can contact NAB Assist on 1800 701 599 to discuss tailored support options.
Read also: How to avoid mortgage stress
CBA
Australia’s biggest bank, Commonwealth Bank will also lift all variable home loan rates.
Starting 27 March, CBA’s variable home loan customers will see their rates increase by 0.25% p.a.
CBA remains Australia’s largest home loan lender, with APRA data showing the bank’s owner occupier lending totalled more than $403 billion and investment loans at nearly $216 billion as at January 2026.
In light of the latest rate hike, CBA Retail Banking group executive Angus Sullivan said the bank ensures customers are supported with practical assistance.
“We’re committed to making support simple and accessible,” Mr Sullivan said.
CBA customers may opt to utilise the bank’s mobile app and repayment calculator or speak to a lending specialist to understand how the interest rate changes may affect them.
Westpac
Westpac joined the pack, announcing a 0.25% p.a. increase to variable-rate home loans for both owner occupiers and investors.
The bank, which holds the second-largest home loan book in Australia, confirmed a 25-basis point increase will automatically apply to its variable home loan customers, starting 31 March.
Westpac will be the last of the big four to enforce the home loan rate increase.
For a borrower with a $500k home loan paying both principal and interest (P&I), the 0.25% p.a. rate increase will add an estimated $77 to their monthly repayments.
Following RBA’s post-meeting announcement, Luci Ellis, Westpac’s chief economist and former assistant RBA Governor, maintained the bank’s position that another cash rate hike will be delivered in May.
ANZ
ANZ will also increase variable home loan rates by 25 basis points.
Effective 27 March, the bank’s owner occupier, investment, and line of credit home loan rates will all increase by 0.25% p.a.
ANZ is still calling for a May follow‑up hike of 25 basis points, pushing the cash rate to 4.35% where it expects to remain for an extended period.
“That level of interest rate, combined with the negative impact on household finance and demand from the energy price shock, should mark the end of this tightening cycle,” ANZ’s Adam Boyton said.
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