RBA hands down May 2026 cash rate decision

The news follows last week’s announcement from the Australian Bureau of Statistics (ABS) that the annual consumer price index (CPI) climbed to its highest level in over two years in March, with trimmed mean inflation remaining above the Reserve Bank’s target range. Headline inflation rose 4.6 per cent over the year to March, up from 3.7 per cent in February, data from the ABS showed.

In a statement, the board said:

"Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of this increase reflected greater capacity pressures. In addition, the conflict in the Middle East has resulted in sharply higher fuel and related commodity prices, which are already adding to inflation."

In conversation with Accountants Daily, Accounting Home Loans director of sales Cullen Haynes (pictured) said that today’s cash rate hike was anticipated, due to recent inflation figures and global factors.

“The current average interest rate range for residential loans we are seeing today is approximately between 5.7 per cent to 6.2 per cent, depending on the product and your borrowing profile. We expect banks will pass on today’s increase to borrowers within the week,” he said.

“Every 25-basis point (0.25 per cent) increase adds approximately $161 per month to repayments on a $1 million mortgage and can reduce borrowing capacity by around $30,000 to $40,000.”

“We are continuing to see strong refinancing activity. Many borrowers are reassessing their current rate and lender considering the consecutive rates hikes this year. Reviewing your loan helps ensure it remains competitive and suited to your needs,” Haynes continued.

Fixed interest rates have been gradually increasing every month amongst some lenders, he went on.

“Rather than attempting to time the market, borrowers should focus on making decisions based on their own financial circumstances and long-term goals,” Haynes said.

“Accounting professionals can access certain market advantages, that can make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for accountants to gauge what’s best for your individual situation.”