IF you’ve been hoping for a break on your mortgage, the latest update from the National Australia Bank (NAB) is not the news you wanted to hear.
After a surprise jump in inflation, NAB has scrapped its forecast for two interest rate cuts that were expected in November and February
Instead, the bank now believes the Reserve Bank of Australia will hold the cash rate steady at 3.60 per cent until May 2026, pushing any chance of cheaper borrowing costs much further away.
The change came after fresh inflation figures showed prices rising faster than expected. Annual headline inflation climbed back to 3 per cent in August, up from 2.8 per cent in July and the highest level since mid-2024.
A big driver was a sharp 24.6 per cent spike in household electricity bills as State Government energy rebates came to an end. While the RBA’s preferred trimmed mean measure, which excludes volatile items, edged slightly lower to 2.6 per cent, NAB economists say the heat in key service costs is too strong to ignore.
They now believe it will take at least two or three more quarters of steady inflation data before the RBA feels confident enough to start cutting rates.
Other major banks are also sounding more cautious. Commonwealth Bank now says a November rate cut is far from certain, while ANZ has stepped back from its earlier call for a February 2026 cut, though it still sees a small chance of a move later next year.
NAB’s revised forecast is the clearest sign yet that the long-awaited fall in interest rates could still be many months away.
For households, it means higher loan repayments are likely to stick around for longer. Whether you’re paying off a mortgage or planning renovations with finance costs, it’s a reminder to review budgets, shop around for the best deals and prepare for a longer wait before any real relief arrives.
