NAB has today become the fourth big bank to predict a rates hold for the month of February – forecasting a potential reprieve for borrowers in 2024.
Australia's third largest bank updated its cash rate forecast from a prediction of a 0.25 per cent hike, to project a hold when the Reserve Bank (RBA) reconvenes for its first 2024 board meeting next month.
All of the big four banks – ANZ, CBA, Westpac and NAB – believe we are at the peak of the current cash rate cycle at 4.35 per cent.
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They are also united in the prediction that we won't secure a cash rate cut until the second half of the year, but have varying opinions on exactly when that will happen.
Westpac anticipates the first rate cut will occur in August, while NAB believes rates won't fall until November.
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CBA projects it will be September when the RBA first drops rates and ANZ identified quarter four as a general estimation.
The banks are also varied in how many cuts they think will come out of 2024.
Both NAB and ANZ forecast just one rate cut for 2024, while Westpac predicts two and CBA three.
The forecast comes as welcome news for borrowers after enduring 13 rate rises since May 2022.
But RateCity.com.au research director Sally Tindall warned mortgage holders to remain vigilant, with the RBA not ruling out the possibility of another hike.
"It's hugely encouraging to see all big bank economic teams now predict we've seen the last of the cash rate hikes in this cycle, but borrowers shouldn't get too excited just yet," Tindall said.
"At this stage, another hike is looking increasingly unlikely, on the back of better than expected inflation figures, however, borrowers should make sure there's room in the tank for one more, just to be on the safe side."
Tindall advised mortgagees not to bank on a cash rate reduction in 2024.
"No one knows what's around the corner with 100 per cent certainty – not even the RBA," she said.
"If you need financial relief, don't wait around for the RBA or the government to serve it up on a platter.
"Take the bull by the horns and seek it out for yourself."
The RBA will assemble for its next board meeting on February 5.
