Mortgage outlook for Australians as interest rates may rise in 2026

Banks and economists now expect interest rates to rise in 2026, with some forecasting increases before June; October inflation was reported at 3.8% and core inflation at 3.3%, above the Reserve Bank's 2–3% target.

Economists and several major banks are now warning that interest rates are likely to rise in 2026, reversing earlier expectations of cuts. Inflation has remained above the Reserve Bank of Australia's 2–3% target band. Markets have moved from pricing cuts to expecting hikes. Consumer price data for November is scheduled for release on January 7. Key details: - Some forecasters expect rate increases before June 2026. - Headline inflation was reported at 3.8% in October and core inflation at 3.3%, both above the RBA's target band. - Market pricing has shifted toward hikes, with traders placing roughly a one-in-three chance on a February move and seeing a rise priced by June. - Consumer price data for November is due to be released on January 7. Summary: Rising interest rates would raise borrowing costs for homeowners and influence broader market expectations; the next scheduled data point is consumer price figures on January 7. Undetermined at this time.