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The RBA Raised Rates to 4.85%. Why It Hiked, and What It Means for Your Mortgage

2026-11-03 · Michael Leung

Illustration of a Brisbane street of Queenslander houses at dusk after rain, jacaranda trees in bloom, a couple at a lit kitchen window reading bank letters as another rate rise lands

Illustration generated with Qwen Image 2.1

The Reserve Bank raised the cash rate by 0.25 points to 4.85% on 3 November 2026, its fifth rise this year. The vote was 6 to 3. The reason is inflation: the RBA now expects headline inflation to reach 4.5% by December and not to return to the middle of its 2–3% target until mid-2028.

Six days ago, in part 12, I wrote that I expected a 0.25-point rise to 4.85% on 3 November, at about a 60% chance. That is exactly what happened. Below I explain why the Board moved, what it means for repayments in Brisbane, and what the new forecasts say about jobs, house prices and the next decision.

4.85%
cash rate from 4 November 2026, the highest since December 2008 (RBA)
4.5%
headline inflation the RBA now forecasts for December 2026, up from 3.6% (RBA)
6–3
Board vote: six for a rise, three for a hold (RBA)

The November 2026 rate rise in short

Rates, inflation and jobs at a glance (3 November 2026)
Decision
Cash rate +0.25 to 4.85%, effective 4 November. Vote 6–3; three members wanted to hold at 4.60%.
This year
Fifth rise of 2026 (February, March, May, September, November): +1.25 points from 3.60%
Inflation now
CPI 3.9%, trimmed mean 3.7% over the year to the September quarter. Target: 2–3%.
New forecast
CPI 4.5% in December 2026 (August forecast: 3.6%); mid-point of the target only by mid-2028
Jobs
Unemployment averaged 4.6% in the September quarter; forecast to reach 5.1% by December 2028
Housing
Prices in September almost 5% below their March peak; new housing loans down sharply
Mortgage
About $100 a month more on a $600,000 loan from this rise; about $487 more than in January
My call
Part 12 expected 4.85% on 3 November (about 60%). Correct. Next decision: 8 December.

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Why did the RBA raise rates in November 2026?

Because inflation is higher and stickier than it expected three months ago. The Board said further tightening was needed to bring inflation back to target.
  1. Inflation is broad. The RBA says price rises are spread across goods and services. CPI rose 3.9% and the trimmed mean 3.7% over the year to the September quarter. (The monthly CPI for September alone, which I covered in part 12, was 4.3%.)
  2. Fuel. The Middle East conflict is unresolved and oil supply is disrupted, which keeps energy prices high.
  3. Technology goods. Prices for chips and tech products are rising fast because of the worldwide AI investment boom.
  4. Costs passed on. Firms are passing their higher costs on to customers, and capacity pressures are “a little greater” than the RBA thought in August.
  5. Expectations. Some measures of inflation expectations have risen, and the Board sees “an increasing risk” that higher expectations become embedded. Once people expect prices to keep rising, inflation is much harder to bring down.
RBA cash rate target, January 2025 to now3.5%4.0%4.5%5.0%2025-02-19: 4.10%2025-05-21: 3.85%2025-08-13: 3.60%2026-02-04: 3.85%2026-03-18: 4.10%2026-05-06: 4.35%2026-09-30: 4.60%2026-11-04: 4.85%4.85% from 4 Nov3.60%4.35%5 rises in 20268 DecJan 25Jul 25Jan 26Jul 26

RBA cash rate target since January 2025: three cuts in 2025, five rises in 2026. The dashed line runs to the next decision on 8 December. Source: RBA cash rate target.

Did my part 12 prediction get it right?

Yes, on the size and the timing. I expected 0.25 points to 4.85% on 3 November and put it as the most likely outcome. The 6–3 vote also shows why I did not call it a sure thing.
My odds for 3 November (part 12, 28 Oct) and the outcome0%25%50%75%100%Rise 0.25 to 4.85%60%What happenedHold at 4.60%35%Rise 0.5 to 5.10%5%

My odds for the 3 November decision, published on 28 October 2026 in part 12, and the outcome. The odds were my own judgement, not market pricing. Source: michaelleung.info part 12; RBA media release 3 November 2026.

I should be honest about the path. In part 11 I expected a hold. When the September CPI came in hot, I changed my call in part 12 to a rise, because the quarter was strong, services inflation was speeding up and the RBA’s forecasts were drifting away. Those are the same reasons the Board gave today: broad inflation, a higher forecast and rising expectations.

I put a hold at about 35%, and three of the nine members did vote to hold. So the hold case was real: jobs are weakening, house prices are falling and spending has slowed. The majority decided that waiting was the bigger risk, as the September minutes had hinted.

How high will inflation go now?

The RBA expects headline inflation to peak around 4.5% at the end of 2026, then fall back slowly, reaching the middle of the target only in mid-2028.

This is the biggest change in the November Statement on Monetary Policy. In August the RBA expected 3.6% for December 2026; now it expects 4.5%. The trimmed mean, its preferred measure, is forecast at 3.6% instead of 3.3%. Both stay above 3% until late 2027, about three quarters later than the August forecast.

RBA inflation forecasts, year-endedCPI, Nov forecastTrimmed mean, Nov forecastCPI, Aug forecastTarget 2-3%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%Jun 26Dec 26Jun 27Dec 27Jun 28Dec 28Jun 26: 3.9%Dec 26: 3.6%Jun 27: 2.8%Dec 27: 2.6%Jun 28: 2.4%Dec 28: 2.4%Jun 26: 3.6%Dec 26: 3.6%Jun 27: 3.5%Dec 27: 2.9%Jun 28: 2.5%Dec 28: 2.4%Jun 26: 3.9%3.9%Dec 26: 4.5%4.5%Jun 27: 3.7%3.7%Dec 27: 2.7%2.7%Jun 28: 2.5%2.5%Dec 28: 2.4%2.4%

RBA forecasts for annual inflation, November 2026 Statement on Monetary Policy, against the August forecast for headline CPI (dashed). The shaded band is the 2–3% target. Source: RBA Statement on Monetary Policy, November and August 2026.

The RBA also says the risks are “skewed to the upside”. Its forecast assumes energy prices ease. If shipping and refining problems in the Middle East drag on, fuel could stay high or rise further.

What happens to jobs and growth?

Both get weaker. The RBA expects unemployment to climb to 5.1% by the end of 2028 and growth to slow to about 1.3% in 2027.

Unemployment averaged 4.6% in the September quarter, more than the RBA expected. It now forecasts 4.7% by December and 5.1% by December 2028, up from 4.8% in the August forecast. The number of jobs is still expected to grow; part of the rise in unemployment is more people staying in or joining the workforce.

RBA unemployment rate forecastsNovember forecastAugust forecast4.0%4.2%4.4%4.6%4.8%5.0%5.2%5.4%Jun 26Dec 26Jun 27Dec 27Jun 28Dec 28Jun 26: 4.4%Dec 26: 4.5%Jun 27: 4.6%Dec 27: 4.7%Jun 28: 4.8%Dec 28: 4.8%Jun 26: 4.4%4.4%Dec 26: 4.7%4.7%Jun 27: 4.8%4.8%Dec 27: 4.9%4.9%Jun 28: 5.0%5.0%Dec 28: 5.1%5.1%

RBA forecasts for the unemployment rate (quarterly average), November 2026 against August 2026 (dashed). Source: RBA Statement on Monetary Policy.

Growth tells the same story. GDP growth was 2.1% over the year to June 2026, a little stronger than expected, but the RBA sees it slowing to 1.6% by December and 1.3% through 2027. Weak productivity growth keeps a lid on how fast the economy can grow without pushing up prices.

RBA GDP growth forecasts, year-endedNovember forecastAugust forecast0.5%1.0%1.5%2.0%2.5%Jun 26Dec 26Jun 27Dec 27Jun 28Dec 28Jun 26: 1.9%Dec 26: 1.4%Jun 27: 1.5%Dec 27: 1.6%Jun 28: 1.6%Dec 28: 1.8%Jun 26: 2.1%2.1%Dec 26: 1.6%1.6%Jun 27: 1.6%1.6%Dec 27: 1.3%1.3%Jun 28: 1.3%1.3%Dec 28: 1.5%1.5%

RBA forecasts for annual GDP growth, November 2026 against August 2026 (dashed). Source: RBA Statement on Monetary Policy.

Illustration of a young Chinese-Australian family in a Brisbane townhouse kitchen at night checking their mortgage repayment on a phone, a calculator and a mug of tea on the bench

Illustration generated with Qwen Image 2.1

What does a 4.85% cash rate mean for my mortgage?

About $16 to $17 a month more for every $100,000 borrowed from this rise, if your bank passes it on in full. Since February, the five rises add up to about $81 a month per $100,000.

The table uses a 30-year principal-and-interest loan and assumes a variable rate of 6.60% before this rise (6.85% after) and 5.60% in January, before the first rise of 2026. Your own rate and loan terms will differ, so treat these as rough guides.

LoanMonthly repayment at 6.85%Extra from this riseExtra since JanuaryExtra a year since January
$400,000$2,621+$66+$325+$3,897
$600,000$3,932+$100+$487+$5,845
$800,000$5,242+$133+$649+$7,793
$1,000,000$6,553+$166+$812+$9,742
Extra monthly repayment, 30-year loanThis rise (6.60% to 6.85%)Since January (5.60% to 6.85%)$0$300$600$900$400,000: +$66 a month+$66$400,000: +$325 a month+$325$400k$600,000: +$100 a month+$100$600,000: +$487 a month+$487$600k$800,000: +$133 a month+$133$800,000: +$649 a month+$649$800k$1,000,000: +$166 a month+$166$1,000,000: +$812 a month+$812$1,000kAssumed variable rates; my calculation, not advice

Extra monthly repayment by loan size: from this 0.25-point rise, and since January 2026. 30-year principal and interest; assumed variable rates 5.60%, 6.60% and 6.85%. My own calculation, not financial advice.

Banks usually announce their changes within a few days. If you are on a variable loan, check whether your bank has lowered your repayment amount in the past; some only change it if you ask. If you have a buffer in an offset account, the rise matters less. If you are close to your limit, talk to your lender early rather than late.

Illustration of the edge of an Australian city at golden hour, a data centre under construction with cranes beside a suburb with for-sale boards and a passing freight train

Illustration generated with Qwen Image 2.1

What does the rate rise mean for the wider economy?

Slower spending, softer house prices and a cooler job market, which is what the RBA wants in order to bring inflation down. Data centres are the main bright spot.

Will the RBA raise rates again?

Possibly, but not necessarily in December. The RBA did not commit; it said it will do what it considers necessary and watch the data. Before the meeting, markets priced about 1.5 more rises by mid-2027.

My view has not changed from part 12: after a rise in November, I lean towards a pause on 8 December while this year’s rises work through. I put a December hold at about 65% and another 0.25-point rise at about 35%. A hot October CPI on 25 November would push me towards a rise. These are my own judgements, not RBA guidance.

Show the RBA forecast table (November vs August 2026)
PeriodGDP growthUnemploymentCPITrimmed mean
Jun 20262.1 (1.9)4.4 (4.4)3.9 (3.9)3.6 (3.6)
Dec 20261.6 (1.4)4.7 (4.5)4.5 (3.6)3.6 (3.3)
Jun 20271.6 (1.5)4.8 (4.6)3.7 (2.8)3.5 (3.0)
Dec 20271.3 (1.6)4.9 (4.7)2.7 (2.6)2.9 (2.6)
Jun 20281.3 (1.6)5.0 (4.8)2.5 (2.4)2.5 (2.4)
Dec 20281.5 (1.8)5.1 (4.8)2.4 (2.4)2.4 (2.4)

Year-ended %, unemployment as a quarterly average. August 2026 forecasts in brackets. Forecasts finalised 28 October 2026. Source: RBA Statement on Monetary Policy, November 2026.

Download the charts

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Common questions

What is the RBA cash rate in November 2026?

4.85%. The RBA raised it by 0.25 points on 3 November 2026, effective 4 November. It is the fifth rise of 2026 and the highest cash rate since December 2008.

Why did the RBA raise interest rates in November 2026?

Inflation is high and broad, and the RBA raised its forecast sharply: headline inflation is now expected to reach 4.5% by December 2026. Fuel prices, technology goods, firms passing on costs and rising inflation expectations were the main reasons given.

How much will my mortgage repayments go up?

If your bank passes on the full 0.25 points, about $16 to $17 a month for every $100,000 borrowed, or about $100 a month on a $600,000, 30-year loan at around 6.6% to 6.85%.

When will inflation come down in Australia?

The RBA expects inflation to stay above 3% until late 2027 and to reach the middle of its 2–3% target in mid-2028.

Will the RBA raise rates again in December 2026?

The RBA has not said. Before the November meeting, markets expected about 1.5 more rises by mid-2027. My own view is that a pause on 8 December is more likely, at about 65%, unless the October CPI on 25 November is hot.

Why did three Board members vote to hold?

The RBA’s statement does not give individual reasons. The case for holding is in its own data: growth is slowing, unemployment is rising, house prices have fallen and earlier rises this year are still working through.

Sources

  1. RBA · Statement by the Monetary Policy Board: Monetary Policy DecisionRBA · Monetary Policy Board decision, 3 November 2026
  2. RBA · Statement on Monetary Policy, November 2026RBA · Statement on Monetary Policy, November 2026 (in brief)
  3. RBA · Statement on Monetary Policy, November 2026: OverviewRBA · Statement on Monetary Policy, November 2026: overview and forecast table
  4. RBA · Cash Rate TargetRBA · cash rate target history
  5. Inflation Hit 4.3% in September. Why I Now Expect the RBA to Hike on 3 NovemberMichael Leung · part 12, published 28 October 2026

Tags

General information only, not financial advice. Research was AI-assisted; every figure was checked against RBA publications on 3 November 2026. The odds, mortgage assumptions and views on future rates are my own.

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Start the series from part 1由第一篇開始閱讀 →