RBA hikes to 4.85%: what it means for your mortgage
On 3 November 2026 the Reserve Bank lifted the cash rate target by 25 basis points, from 4.60% to 4.85%. That makes five hikes this year: February, March, May, September and now November. This one was not unanimous: six Board members voted to raise, three voted to hold at 4.60%.
Why the RBA moved
The main points from the Board's statement:
- Inflation is broad, not just fuel. The Board said recent data show inflation is broadly based, and that higher fuel prices are being passed through to the prices of other goods and services.
- The forecasts got worse. The inflation outlook was revised "materially higher". Inflation is now expected to stay above 3 per cent for the coming year and not reach the top of the 2–3 per cent target range until late 2027, about three quarters later than the RBA previously expected.
- Capacity is tighter than thought. Domestic capacity pressures were judged a little tighter than earlier estimates, and firms report cost pressures they are passing on.
- Expectations risk. Some measures of inflation expectations have risen, and the Board said there is an increasing risk that higher expectations become embedded.
The Board also acknowledged the other side of the ledger: the economy is slowing, housing prices have fallen significantly, and unemployment has risen and is projected to rise further. Three members voted to leave the cash rate unchanged at 4.60%; the release does not set out their reasons.
The Board said it "will continue to do what it considers necessary to bring inflation sustainably back to target".
What it adds to your repayments
If your lender passes the full 0.25 points on to your variable rate, these are illustrative figures for a 30-year principal-and-interest loan moving from 6.50% to 6.75%:
| Loan balance | Before (6.50%) | After (6.75%) | Extra per month |
|---|---|---|---|
| $400,000 | $2,528 | $2,594 | +$66 |
| $600,000 | $3,792 | $3,892 | +$100 |
| $800,000 | $5,057 | $5,189 | +$132 |
Across all five 2026 hikes (125 basis points in total), a $600,000 variable loan now costs roughly $485 more per month than it did in January, if every hike was passed through in full and your rate has moved from 5.50% to 6.75%.
Your own numbers depend on your rate, your remaining term and your lender. Run them in the mortgage repayment calculator.
What to do now
- Stress-test one more move. Nothing in the statement rules out a further increase in December. Use the mortgage stress test calculator to see whether your budget copes with a further +0.25 to +0.50 points.
- Check your offset and extra repayments. If you have an offset account linked to your variable loan, the balance in it reduces the amount charged interest, and that saving grows as your rate rises, assuming the balances stay the same.
- Re-run fixed vs variable. Fixed rates generally already reflect the moves lenders expect, so a hike doesn't automatically make fixing worthwhile. Compare current quotes in Fixed vs Variable: Which Rate Is Better in 2026?
- Ask your lender for a better rate. Lenders often advertise lower rates to new customers than existing ones pay, so ask what your lender will do, and compare any refinancing saving against switching costs and how long you expect to keep the loan.
- If you're struggling, act early. Lenders must consider a hardship request under the National Credit Code, and the free National Debt Helpline (1800 007 007) can help before repayments are missed.
When is the next decision?
The Monetary Policy Board's last meeting of 2026 is on 7–8 December. The decision will be announced at 2:30pm AEDT on 8 December.
Source: RBA media release 2026-30, Statement by the Monetary Policy Board: Monetary Policy Decision, 3 November 2026. Repayment figures are illustrative calculations, not lender quotes.
This article is general information only and does not consider your personal circumstances. It is not financial advice.