The Reserve Bank of Australia’s August 2026 Statement on Monetary Policy provides an updated view of inflation, economic growth and the outlook for Australian households.

Inflation remains elevated

The RBA expects inflation to remain above the midpoint of its 2–3% target range for some time. Inflation is forecast to ease gradually as spending across the economy slows and cost pressures reduce.

For borrowers, this suggests interest rates may remain higher for longer while the RBA continues to focus on bringing inflation back towards target.

The economy is expected to slow

Earlier interest rate increases are continuing to work through the economy. The RBA expects household spending and economic activity to slow as higher borrowing costs affect household budgets.

The unemployment rate is also expected to increase gradually as employment growth slows.

What this means for borrowers

Borrowers may continue to experience pressure from higher repayments and living costs. Those considering buying a home or refinancing should factor current interest rates into their budget and consider how future rate changes could affect repayments.

Reviewing your existing home loan can also help you understand whether your current loan structure, rate and features continue to suit your financial needs.

A mortgage broker can help explain available lending options and assist you in comparing loans based on your individual circumstances.