Westpac is forecasting three more Reserve Bank rate hikes this year, taking the cash rate to 4.85% by August – a level not seen since the fallout from the Global Financial Crisis.
The bank expects 0.25 percentage point increases in May, June and August. Combined with the two hikes already delivered in 2026, that would make five consecutive rises.
Westpac stands alone among the big four. CBA, NAB and ANZ are all tipping just one more hike in May, which would leave the cash rate at 4.35%.
The bank points to ongoing fuel supply disruptions and their faster-than-expected flow-through to broader prices as the drivers.
It doesn’t expect the RBA to start cutting rates until 2028.
According to Canstar analysis, three more hikes would add approximately $276 a month to repayments on a $600,000 loan with 25 years remaining.
Including the two hikes already delivered this year, total monthly increases would reach $457.
On a $1 million mortgage, the five-hike scenario would mean roughly $5,466 in additional repayments across 2026.
“Borrowers could be in for a tough couple of years if Westpac’s forecast for three further hikes and no rate cuts til 2028 comes to pass,” Sally Tindall, Canstar’s data insights director, said.
“While the other big banks are tipping just one more hike, Westpac is now forecasting a far more aggressive path.”
Ms Tindall said that the federal government’s decision to halve the fuel excise may provide limited relief if the RBA responds with rate increases.
“If the RBA then goes and hikes the cash rate, it could turn into a merry-go-round of money passed from the bowser to the banks,” she said.
She advised borrowers to treat the forecast as a warning to review their mortgage arrangements rather than a certainty.