Brace yourselves, homeowners: another mortgage rate hike could be just around the corner. Millions of Australian families are on the edge of their seats as the nation’s biggest bank hints at an imminent increase in interest rates—and this time, it’s hitting right when household budgets are already stretched thin.
In a move that’s sent shockwaves through the market, the Commonwealth Bank (CBA) dropped a bombshell in its December 2025 Wage and Labour Insights report. Despite a slight dip in wage growth—from 3.2% in October to 3.1% in November—the bank remains steadfast in its prediction: the Reserve Bank of Australia (RBA) is likely to raise rates at its February 3 meeting. But here’s where it gets controversial: Is this hike truly justified, or is it another blow to families already reeling from 13 rate increases since 2022?**
For context, a typical $600,000 mortgage could see repayments jump by $90 per month if rates rise by just 0.25 percentage points. That’s according to Canstar analysis, which also reveals that a $750,000 loan would climb by $112, while $1 million mortgages would soar by $150 monthly. And this is the part most people miss: These increases come at the worst possible time—just as school fees, summer power bills, and Christmas credit card debts are due.
CBA’s head of Australian economics, Belinda Allen, cautions that nothing is set in stone. Much hinges on the Q4 2025 CPI data, due January 28. November’s inflation figures showed a slight cooling, with headline inflation dropping from 3.8% to 3.4%. Yet, analysts warn this is still well above the RBA’s target range. Canstar bluntly notes, “It’s a long way from the midpoint of 2.5%.”
Meanwhile, consumer confidence data paints a mixed picture. The ANZ-Roy Morgan Australian Consumer Confidence index rose to 84.5 in the week to January 11, but ANZ economist Sophia Angala points out, “This is the weakest new year’s print in over 15 years.” One bright spot? The ‘time to buy a major household item’ subindex hit its third-highest reading since early 2025, suggesting some optimism remains.
The economy added 23,000 jobs in December, and quarterly wage growth held steady at 0.8%, according to CBA data. But with key dates looming—January 22 for labour force data, January 28 for CPI figures, and February 3 for the RBA’s rate decision—the question on everyone’s mind is: Can households weather another storm?
What do you think? Is another rate hike fair, or is it too much, too soon? Share your thoughts in the comments below—let’s spark a conversation!
