Board keeps rates on hold for a third straight meeting; mortgage relief still tied to next quarterly CPI print.
The RBA board voted to leave the official cash rate unchanged at 3.60% at its June 2026 meeting, marking a third consecutive hold after the aggressive tightening cycle that began in mid-2022. Governor Michele Bullock said the board was "close, but not yet confident" that services inflation would return to the 2–3% target band without further help.
Headline CPI came in at 2.9% for the March quarter, comfortably inside the target band for the first time in three years. But the trimmed-mean measure the board watches most closely sat at 3.1%, and services inflation — the stickiest component, driven by rents, insurance and health — is still running above 4%.
The labour market has cooled but not cracked: unemployment ticked up to 4.4% in May, wages growth eased to 3.3% year-on-year, and job vacancies are down about 25% from their 2023 peak. That is roughly the "gentle landing" profile the RBA has been engineering, which is why the board sees no urgency to cut.
Variable owner-occupier rates at the big four banks sit between 6.14% and 6.44%. On the median Melbourne loan of roughly $620,000, that is about $970 more per month than the same borrower was paying in April 2022. Fixed rates for two- and three-year terms have started to tick down in anticipation of cuts, with CBA, Westpac, NAB and ANZ all trimming their advertised fixed products in the past month.
For the roughly 800,000 Victorian households with a mortgage, the hold means another quarter of pressure. Arrears at 30 days past due have climbed to 1.4% of loans — still low by long-run standards, but the highest since 2018.
CoreLogic data shows Melbourne dwelling values were essentially flat over the past twelve months, up just 0.3% while Brisbane, Perth and Adelaide all posted double-digit gains. Auction clearance rates in Melbourne have been sitting in the low-60s each weekend — a market waiting for a signal.
Rental vacancy is at 1.2%, and advertised rents in inner Melbourne are up 6.8% year-on-year. Higher rates flow to renters too: investors facing higher servicing costs pass what they can through to tenants, and new supply has slowed as small builders exit the market.
The other side of the ledger: term deposit rates from the big four are between 4.6% and 5.0% for 12 months, and high-interest online savings accounts advertise up to 5.5% for balances under $250,000. Retirees and those with cash on the sidelines have not had returns this attractive since before the GFC.
Two dates matter. The June-quarter CPI release lands in late July and will decide whether services inflation is genuinely rolling over. The August RBA meeting is the first live opportunity for a cut; markets are pricing roughly a 60% chance. Beyond that, futures imply two cuts by year-end, taking the cash rate to 3.10%.
If the cuts arrive on that timeline, monthly repayments on the median Melbourne mortgage would fall by about $200. If services inflation surprises to the upside — a fresh oil shock, a wage settlement well above trend, another spike in insurance premiums — the first cut could slip into 2027.