How fast are lenders hiking rates?

Lenders have begun updating interest rates for mortgage and savings products following the Reserve Bank of Australia’s (RBA) decision to increase the official cash rate by 25 basis points, to 4.35 per cent, on Tuesday (5 May).

The May decision marks the third 25-basis-point increase in 2026, returning the cash rate to a level last seen during the 15-month rate stability period between November 2023 and February 2025.

The RBA board indicated the move was driven by a consumer price index (CPI) increase to 4.6 per cent in March and rising fuel costs stemming from conflict in the Middle East.

Several lenders have now announced when they will begin lifting rates, with nearly three weeks between the fastest and slowest movers.

The four major banks (Commonwealth Bank of Australia [CBA], Westpac, National Australia Bank [NAB], and ANZ) will all implement their mortgage rate increases effective 15 May 2026.

However, AMP Bank has emerged as the fastest mover of the lenders that have announced so far, with an effective date of 11 May.

Speaking of the decision, Sean O’Malley, AMP Bank’s group executive, flagged that while mortgage rates will increase soon, savers would also be able to access a higher savings rate at the same time.

He said: “Higher rates are difficult for many borrowers, and we know household budgets are under increasing pressure. Customers who need support should contact us early – we’re here to help.

“But rising rates should also work fairly for savers,” he said, noting that AMP Bank GO saving accounts will increase by 0.25 per cent to 5.10 per cent p.a. for Personal Save balances and to 4.75 per cent p.a. for Business Save balances, “without asking them to jump through hoops to earn it”.

MyState Bank is also among the first movers, lifting rates from 14 May.

This is weeks ahead of the slowest mover so far, Teachers Mutual Bank, which will not implement rate changes on mortgages or savings accounts across its five retail brands (Teachers Mutual Bank, Australian Mutual Bank, Firefighters Mutual Bank, Health Professionals Bank and UniBank) until 1 June.

Greg Johnson, Teachers Mutual Bank Limited’s chief customer officer, said: “For our home loan members, we understand the RBA’s announcement may add further pressure to households already stretched and feeling the effects of global volatility. To support these members, we are delaying these changes until 1 June.”

Other lenders that have said they will wait a few weeks before lifting rates include Macquarie Bank, which has scheduled its implementation for 22 May.

The bank’s head of personal banking, Ben Perham, noted: “In response to the RBA’s announcement earlier today, we will be increasing both our variable home loan rates and the interest rates available on our everyday variable rate bank accounts. To give our customers more time to adjust to the higher interest rate environment, we are once again delaying this increase by more than two weeks.”

Speaking of the impact of cash rate hikes, Greens spokesperson for Finance, Housing, and Homelessness, Senator Barbara Pocock, commented: “Every time the RBA puts interest rates up, mortgage holders and renters pay the price, while the big banks profit directly out of the pockets of owner-occupiers and first home buyers.

“For decades, the major banks have made enormous profits price-gouging on people’s mortgages, contributing to the pain of inflation.

“Australians have had enough. They’re fed up with seeing the banks and wealthy property investors profit from a housing crisis, while wages aren’t keeping up with house prices and inflation.”

More rate hikes expected

The RBA’s move to increase the official cash rate this month comes as the central bank moves to take monetary policy into more restrictive territory and try to tackle rising inflation largely brought about by the conflict in the Middle East.

Moreover, in a press conference following the rate decision on Tuesday, RBA governor Michele Bullock said that prices would likely continue to rise as global supply chains remain blocked.

“We are poorer, and there is no way out of that,” she said.

“These interest rate rises are not going to do anything for inflation in the next six months. That’s done and dusted. We know those prices are coming through.”

Following the RBA decision and the governor’s press conference, NAB updated its cash rate forecast to include a further hike in June.

NAB acknowledged that under normal circumstances, delivering 75 basis points of tightening in three months would argue for a pause, but it suggested the governor’s post‑meeting remarks were evidence that the board was not inclined to sit on its hands.

“The governor explicitly called the ‘wait and watch’ strategy the ‘wrong term’ in her press conference, and so it doesn’t appear that the Board thinks it has time on its side,” NAB economists said.

“This, together with the board’s clear preference to prioritise the price stability aspect of its dual mandate given a broadly benign labour market forecast, suggests to us that the next rate rise will come in June.”

Over the longer horizon, NAB expects the RBA to begin easing only once it is comfortable that inflation is under control, adding that it expects two cuts in the first half of 2027.

Westpac remains the most hawkish, forecasting two additional hikes by August, while CBA and ANZ currently forecast a hold at the next cash rate meeting (announced on 16 June).

Finni broker Eva Loisance, speaking on the Broker Daily Uncut podcast, warned that the speed of the current cycle is testing the limits of high-LVR borrowers.

“People that bought at 95 per cent LVR plus are right on the edge... we haven’t seen any banks saying: ‘We’re going to drop the assessment rate to really push against it.’ It’s 3 per cent on top of advertised rates now. So borrowing capacity is just decreasing,” Loisance said.

[Related: RBA hikes cash rate to 4.35%]

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