Key takeaways
Most economists expect the RBA to lift rates again at the May meeting, with inflation still well above target and proving more persistent than hoped.
Borrowers are under increasing pressure, with higher repayments adding thousands annually, even as the RBA believes households can still cope.
The broader expectation is that interest rates may stay higher for longer.
It’s shaping up to be another uncomfortable week for borrowers, with most economists expecting the Reserve Bank to raise interest rates yet again.
In this month’s Finder RBA Cash Rate Survey™, 36 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
Three-quarters of the panel (75%, 27/36) expect the RBA to raise the cash rate on Tuesday – the third hike in this new tightening cycle.
Richard Whitten, home loans expert at Finder, said another rate rise will be a bitter pill to swallow for households already reeling from rising costs.
“Another rate rise would take the cash rate back to its 2024 peak, but the economic environment is tougher now.
Inflation has continued to rise in that time, meaning Australians are in an even worse position than they were two years ago.
While default rates remain low, and the RBA likely believes borrowers can handle a slightly elevated rate, it’s hard to imagine rates going much higher without something breaking,” Whitten said.
Michael Yardney, Founder of Metropole Property Strategists, said:
“The latest CPI figures don’t really justify an urgent rate hike, with inflation at 4.6% and coming in below expectations.
However, the 0.9% monthly jump, driven largely by fuel costs, will concern the RBA because of the risk these short-term shocks feed into broader inflation expectations, which is what they are ultimately trying to control.
While there’s a strong argument they should hold rates steady, given policy is already restrictive and much of this inflation is supply-driven, the RBA is still managing its credibility after previously underestimating inflation.
That means they’re likely to err on the side of being seen as tough, even if another rate rise does little to address the underlying causes of current price pressures.
The risk, though, is that they overcorrect just as the economy is slowing, increasing pressure on households and potentially worsening structural issues like rental inflation without meaningfully reducing the real drivers of inflation.”
Stella Huangfu from the University of Sydney said this week’s CPI showed annual inflation at 4.6%, well above the RBA's 2-3% target.
“Underlying inflation also remains elevated, suggesting price pressures are not just a temporary fuel-price spike. This makes a rate increase next week more likely, as the RBA will want to keep inflation expectations anchored,” Huangfu said.
Meanwhile, Saul Eslake from Corinna Economic Advisory Pty Ltd is one of the 25% (9/36) anticipating a hold.
He said:
“Although headline inflation rose sharply in March, 'underlying' inflation was unchanged from February at 3.3%.
Yes, that's still above the top end of the RBA's inflation target band – but no more than it was a month ago.
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And the increase in fuel prices has a similar impact on aggregate household finances to a further increase in interest rates.
So if 'underlying' inflation hasn't risen further, the RBA doesn't need to raise rates again in May (since it's already raised them twice this year). It can afford to "wait and see" what happens to inflation expectations.
More than half of the experts forecasting a hike in May (52%, 14/27) expect a follow-up hike to the cash rate as soon as August this year, with a further 26% (7/27) tipping a September move.
Experts divided on whether it’s too late to fix your mortgage
According to Finder's data, opinion is split on whether it is now too late for Australian homeowners to seek protection via a fixed rate mortgage:
Of those who weighed in* (41%, 9/22) say it’s too late, while 41% (9/22) believe it’s not too late to fix.
The remaining 18% (4/22) said they aren’t sure.
Shane Oliver from AMP said now probably isn’t the ideal time to fix. He explained:
"It's not the best time as fixed rates have already gone up, but it can still afford some protection if a borrower can't afford any further increase in variable rates."
On the other hand, Richard Whitten said fixing your interest rate is never about beating the banks.
“Banks are better at predicting rate movements than their customers. It's their business.
“Right now, the most competitive 1 and 2 year fixed rates are quite similar to the most competitive variable rates.
“It really depends on your goals. If you think interest rates are likely to rise further this year (and signs suggest they will) then fixing today means protecting yourself from future rate rises.
It's about being able to budget more effectively for your repayments."
A rate hike will cost the average borrower an extra $2,657 a year (compared to the start of this year)
Finder's data show that Aussies with the average home loan of $736,259 will have to fork out $2,657 more per year on their mortgage (compared to what they were paying before the RBA started hiking the cash rate this year) if the cash rate rises by 25 basis points in May.
Mortgage repayments on average home loan of $736,259
| Cash rate | Average home loan rate* | Average monthly repayment | Average monthly increase since Jan 2026 | Average annual increase since Jan 2026 | |
| January 2026 | 3.60% | 5.51% | $4,186 | ---- | ---- |
| March 2026 | 4.10% | 5.76% | $4,302 | $116 | $1,337 |
| May 2026 (full rate rise applied) | 4.35% | 6.01% | $4,419 | $233 | $2,661 |
Stepping back, what we’re really seeing is the cumulative impact of a tightening cycle that is steadily eroding household buffers rather than breaking them outright, at least for now.
While the RBA remains focused on bringing inflation back under control, borrowers are being asked to absorb higher repayments in an environment where living costs are already stretched.
The challenge isn’t just this next rate rise, but how long Australians can continue to adapt if rates stay higher for longer, which is increasingly looking like the more likely scenario.
