Australian Bank Announces Imminent Interest Rate Increase
Households across Australia are bracing for higher mortgage repayments, following an imminent interest rate increase. The Commonwealth Bank has indicated that the Reserve Bank is likely to raise rates during its upcoming meeting on February 3, 2026. This rate hike could result in additional monthly repayments of up to $150 for homeowners.
Impact of the Interest Rate Increase
The expected increase will significantly affect mortgage holders, especially those with larger loans. Analysis from Canstar indicates that:
- A typical mortgage of $600,000 could see monthly repayments rise by $90.
- A $750,000 mortgage may increase by $112 per month.
- Homeowners with $1 million loans might face an extra $150 monthly.
This news comes as many Australian families are already managing financial pressures from school fees, rising summer power bills, and seasonal credit card debts.
Economic Indicators and Predictions
According to the bank’s December 2025 Wage and Labour Insights report, the Reserve Bank’s prediction aligns despite a slight easing in wage growth. Annual wage increases fell to 3.1% in November, down from 3.2% in October. CBA’s head of Australian economics, Belinda Allen, explained that while wage growth has slowed, it is not enough to alter the bank’s outlook for an imminent interest rate rise.
“We continue to foresee a February 2026 rate hike as the most likely scenario,” Allen stated.
Inflation Data and Consumer Confidence
Recent inflation data shows a decline, with the Consumer Price Index (CPI) easing from 3.8% in October to 3.4% in November. However, analysts caution that inflation remains above the Reserve Bank’s target range. Many expect that a clearer picture will emerge when the fourth-quarter CPI data is released on January 28.
The ANZ-Roy Morgan Australian Consumer Confidence index rose three points to 84.5 in the week ending January 11, suggesting some consumer optimism. Yet, ANZ economist Sophia Angala noted this is the weakest reading for the start of a new year in over 15 years.
Key Dates to Watch
Several important economic indicators are approaching that could influence the Reserve Bank’s decision:
- January 22: Labour force data release
- January 28: CPI inflation figures
- February 3: RBA interest rate decision
As millions prepare for the financial implications of a potential interest rate increase, ongoing monitoring of these economic factors is crucial for Australian homeowners.
