Commonwealth Bank, Westpac, NAB and ANZ expect the RBA will hold the cash rate steady at its September meeting. (Source: Getty\/Yahoo Finance) <\/p>\n
Australia\u2019s Big Four banks<\/a> have ruled out a September interest rate cut, unanimously expecting the Reserve Bank of Australia (RBA) to hold the cash rate steady<\/a> at 3.6 per cent next week. The banks still expect further cuts<\/a> to be on the horizon, but it may not be as many as mortgage holders hope for.<\/p>\n Commonwealth Bank<\/a>, Westpac<\/a> and ANZ<\/a> are sticking to their November rate cut forecasts, but have acknowledged there is a \u201creal risk\u201d to this call. NAB<\/a> pushed back its forecast and now expects the RBA to hold rates until May next year.<\/p>\n Commonwealth Bank head of Australian economics Belinda Allen said market pricing had also \u201cshifted significantly\u201d this week.<\/p>\n RELATED<\/p>\n \u201cMarkets are pricing no chance of a cut in September, compared to 20 per cent chance at the start of the month,\u201d she said.<\/p>\n \u201cThe movement for the November has been more dramatic. Pricing has moved from an 80 per cent chance for a 25 basis point rate cut under 50 per cent.\u201d<\/p>\n Allen said the August monthly CPI<\/a> data \u201cthrew a spanner in the works\u201d.<\/p>\n Headline inflation rose to an annual rate of 3 per cent in August, up from 2.8 per cent in the previous month.<\/p>\n Trimmed mean inflation was 2.6 per cent in August, down from 2.7 per cent in July.<\/p>\n Do you have an interest rates story to share? Contact tamika.seeto@yahooinc.com<\/p>\n While Commonwealth Bank<\/a> hasn\u2019t changed its November forecast, Allen said the cut was \u201cnot a done deal\u201d and would depend on the Q3 inflation numbers, with labour market data also important to watch.<\/p>\n Westpac chief economist Luci Ellis said the bank\u2019s base case was cuts in November, February and May, but also noted a November cut was now \u201cless certain\u201d and the central bank may end up cutting by less<\/a>.<\/p>\n \u201cWith the economy already broadly at full employment and inflation at target, the RBA will not rush to cut rates, but neither will it see a need to keep policy unnecessarily restrictive for an extended period,\u201d Ellis said.<\/p>\n “The timing of future rate cuts remains uncertain and it is possible the RBA ends up cutting by less than our current base case.”<\/p>\n NAB economists previously expected cuts in November and May, but have now scrapped this and expect just one more cut in May next year<\/a>.<\/p>\n \u201cWe now see the RBA on hold at 3.60 per cent until May 2026 as it will take some time for the RBA to rebuild confidence in the inflation trajectory,\u201d they said.<\/p>\n ANZ economists have flagged that the rate-cutting cycle<\/a> may be nearing its end.<\/p>\n “We suspect that message will also be conveyed by the RBA next week, most likely through phrasing along the lines of: ‘it is possible there might not be many more rate cuts’,\u201d they said.<\/p>\n The bank noted there was a \u201creal risk of no rate cut in November\u201d, with the path forward highly data dependent.<\/p>\n “We also retain our view that once the cash rate reaches 3.35 per cent it is likely to stay at that level for a considerable period,\u201d economists said.<\/p>\n If the RBA cuts interest rates<\/a> in November, a borrower with a $600,000 mortgage at the start of the rate cuts could see their monthly repayments drop by $87, according to Canstar.<\/p>\n When added to the three previous cuts in February, May and August, the total monthly repayment drop would be $359.<\/p>\n Here\u2019s how much other borrowers could save:<\/p>\n $500,000: $73 November cut, $299 across all four cuts<\/p>\n $600,000: $87 November cut, $359 across all four cuts<\/p>\n $750,000: $109 November cut, $449 across all four cuts<\/p>\n $1 million: $145 November cut, $598 across all four cuts<\/p>\n Canstar data insights director Sally Tindall said a November rate cut was by no means a given.<\/p>\n \u201cThe one rate cut you can bank on is the one you negotiate yourself<\/a>, either by switching to a lower rate lender or haggling with your current bank,\u201d she said.<\/p>\n \u201cIf you\u2019re an owner-occupier paying down your debt, know that the average variable rate is currently sitting at around 5.53 per cent. If you\u2019re not under this mark, ideally well under, then it\u2019s time to ask yourself why.\u201d<\/p>\n The RBA will announce its decision at 2:30pm on Tuesday, September 30.<\/p>\n It has two more meetings remaining after that this year, on November 3 and 4, and December 8 and 9.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n Westpac chief economist Luci Ellis (left) said the bank expects November, February and May cuts, while CBA head of Australian economics Belinda Allen (right) expects just one more November cut. (Source: Westpac\/CBA) <\/p>\n