Three consecutive rate hikes are now the forecast for three of Australia’s Big Four banks.
Three of Australia’s Big Four banks predict a trio of back-to-back rate rises will slug typical capital city mortgage holders up to $8,000 a year extra – but borrowers have a secret weapon.
Australia’s three biggest banks – the Commonwealth Bank, Westpac and National Australia Bank – have all revised their interest rate predictions, flagging three consecutive hikes that would savage household budgets – wiping out last year’s falls and taking the cash rate target back to 2024 levels.
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Three consecutive rate hikes are now forecast by three of the big four banks with wide impacts. Source: Canstar.com.au
A typical $1 million mortgage – the median house price for Australian capital cities – would cost an extra $5,436 a year, according to calculations by Canstar.com.au – the equivalent of 70 full tanks of petrol at today’s escalated prices.
Borrowers with a $1.5 million loan face a bigger hit of $8,160 annually, nearly three times the average Australian’s annual petrol bill, ironic given fuel inflation is a major factor in the increased rates predictions.
Canstar data insights director Sally Tindall said borrowers have already taken one rate hike in February, but if the latest forecasts play out, households could be facing two further rate rises – on Tuesday and in May.
“If we do see three rate hikes this year, many borrowers’ monthly repayments won’t be rising by a hundred odd dollars a month, but rather hundreds of dollars a month,” she said. “In the case of a $1 million debt, for someone who still has 25 years left on their mortgage, the increase is just shy of half a thousand dollars, not as a one off, but every single month.”
March 2026 RBA meeting – market pricing of cash rate move in basis points. Source: Commonwealth Bank
She said “three rate hikes in quick succession will be more than a triple whammy because households are also juggling the end of the electricity rebate, a potential price hike to private hospital premiums, skyrocketing petrol prices, and the continued rising cost of everyday groceries”.
She warned it could easily take those who were struggling well beyond breaking point.
The three rate hikes would wipe out last year’s decreases, taking rates back to the level they were at during 2024.
Ms Tindall said anyone who didn’t decrease their repayments after the three rate cuts last year should see their monthly repayments stay at that level or similar.
“That’s not exactly something to pop the champagne about. After all – paying more in interest to your bank and less towards your mortgage isn’t any borrower’s idea of fun, but at least they know they should be able to take the hit.”
Based on owner-occupier variable loans, excluding first home buyer only, green only and other special condition loans. Lowest rates selected based on rate and then comparison rate. One product per provider is listed. Note equity required takes into account the required 20 per cent deposit to avoid lenders mortgage insurance. Source: Canstar.com.au
Ms Tindall said the secret weapon for borrowers was their equity.
“Thanks to the property boom, a lot of Australians have far more of it than they realise.”
She said equity was the portion of homes owned outright – calculated by deducting what’s owed to the bank from what the property is worth today.
“Equity can often be the golden ticket in today’s mortgage market. Five of the 10 lowest rates for refinancers on Canstar are reserved for borrowers who already own at least 40 per cent of their property.”
She urged borrowers to shop around if their equity had grown, using it to their advantage to refinance to a cheaper lender or negotiate a better deal with their current bank.
Finding a rate that’s 0.5 percentage points lower could slash $6,000 in interest from a $600,000 loan, she said.
“The catch is banks don’t usually call you to tell you your property value has gone up. If you want the better rate, you often have to ask for it, or be willing to walk.”
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