RBA Hikes to 4.85% — Fifth Rate Rise of 2026

The Reserve Bank has raised the cash rate by 0.25% to 4.85%, its fifth rise this year and the highest level since 2008. The Board was split: six members voted for the hike and three wanted to hold at 4.60%. For a typical $600,000 variable loan, repayments are set to rise by about $99 a month once lenders pass the increase on.

What the RBA Said

The RBA said inflation is still too high and is spread across much of the economy, not just a few items. It pointed to higher fuel prices linked to the Middle East conflict, an economy running hotter than it thought, and fast-rising prices for some technology goods. It also acknowledged the other side of the picture: the economy is slowing, home prices have fallen significantly and unemployment has risen.

The RBA’s new forecasts are gloomier on inflation. It now doesn’t expect inflation to fall below 3% (the top of its 2–3% target range) until late 2027, about nine months later than it forecast in August, and not back to the middle of the range until mid-2028. It also expects unemployment to rise by more than it forecast in August.

Why It Was Expected

Three weeks ago a hike looked unlikely. When we previewed the meeting on 11 October, markets saw only about a 20% chance of a hike. Two things changed that:

• The RBA warned the outlook had got worse. Deputy Governor Andrew Hauser said in October that inflation looked "materially worse" than the RBA had expected in August.
• Inflation came in hot. On 28 October, underlying inflation rose 1.0% for the September quarter, faster than the 0.8% the RBA expected. Prices overall were up 4.3% over the year. (See our full breakdown of the inflation figures.)

After the inflation figures, CommBank and NAB both dropped their calls for a hold, so all four big banks went into today expecting a hike to 4.85%. Money markets put the chance of a hike at about 81% on the eve of the meeting.

What It Means for Your Mortgage

Most lenders pass on the full 0.25% rise to variable-rate customers, usually within one or two billing cycles. Here’s roughly what it means for monthly repayments:

Since the start of 2026, five hikes have added 1.25% to the cash rate. On a $600,000 loan, that's roughly $490 a month more than at the start of the year.

Is This the Last Hike?

The big banks don't agree on what comes next:

• CommBank, NAB and Westpac expect the RBA to pause after today. CommBank calls today's move an "insurance hike" and doesn't expect cuts until late 2027. Westpac says the risk of another rise, most likely in February, has gone up.
• ANZ expects one more hike, in December or February, and sees a real risk the cash rate reaches 5.10%.

The RBA didn’t promise more hikes, but it didn’t rule them out either. It said it will keep watching the data and do what it considers necessary to bring inflation back to target. The 6–3 vote shows the Board is divided on how much further to go. The next decision is on Tuesday 8 December.

What Should Borrowers Do Now?

Check when your lender passes on the rise. Most lenders announce within a few days and apply the new rate within one or two billing cycles. If you're on a variable rate, your repayment will go up automatically.

Compare your rate with what new customers get. Existing borrowers often pay 0.5%–1.0% more than the rates lenders advertise to new customers. Closing that gap can save you more than today's 0.25% rise costs.

Plan for rates staying high for a while. CommBank, for one, doesn't expect any rate cuts until late 2027. If your budget is tight, now is the time to talk to us about your options, not after the next hike.

This article contains general information only and does not take into account your personal financial situation, needs or objectives. Consider your own circumstances and seek independent advice — including from us — before acting on anything here.

The bank forecasts and market-implied probabilities in this article about future RBA meetings are third-party estimates, not a guaranteed outcome — the RBA Board can and does decide differently from what markets and economists expect.

Sources: Reserve Bank of Australia, Monetary Policy Decision, 3 November 2026; ABS, Consumer Price Index Australia, September 2026; CommBank, CommBank Economists Forecast November RBA Rate Hike as Inflation Risks Build; Savings.com.au, RBA November Rate Hike Expected, But Will 4.85% Be the Peak?; Newsquawk, RBA Rate Decision Preview, 3 November 2026; RBA, 2026 Monetary Policy Board Meeting Dates (published February 2025); RBA, Statement on Monetary Policy, November 2026; ABC News, Interest Rates Live Updates, 3 November 2026.