The cash rate is now higher than at any point since November 2008. On Melbourne Cup Day, 3 November 2026, the Reserve Bank of Australia (RBA) lifted it by 25 basis points to 4.85%, its fifth increase this year (Kane, 2026). The more telling number was the vote. Six Board members backed the rise and three wanted to hold, after a unanimous decision in September.

Why did the RBA raise rates again?

Inflation is still too high and too widespread. Annual CPI inflation rose to 4.3% in the 12 months to September 2026, with housing the largest contributor and fuel prices driving transport costs higher (Australian Bureau of Statistics [ABS], 2026). The Board said underlying inflation “remains broadly based” and judged that “a further tightening in financial conditions is warranted” (Kane, 2026).

Governor Michele Bullock said the Board was not responding to oil prices directly, but to domestic demand and the risk that high inflation becomes embedded. “Some pain now will prevent even worse pain down the track,” she said (Reserve Bank of Australia [RBA], 2026a).

What does the split vote tell us?

It shows the Board is closer to the end of the cycle than the start. Bullock said those who voted to hold “weighted the downside risks more than the upside risks”, pointing to cooling housing and rising unemployment after four earlier hikes (RBA, 2026a).

It does not tell us the next move. Bullock said plainly: “I don’t know what the next move will be” (RBA, 2026a). The major banks are divided too:

What is the RBA forecasting for 2027?

The RBA’s November forecasts have headline inflation at 4.5% by December 2026, easing to 2.7% by December 2027. Unemployment is forecast to edge up from 4.7% to 4.9% over the same period, and economic growth to slow to 1.3% (RBA, 2026b). Headline inflation is expected to stay above 3% until late 2027.

Those forecasts assume the cash rate rises by about another 35 basis points by mid-2027, in line with market pricing at the time, before easing slightly (RBA, 2026b). In other words, the RBA’s central scenario does not include rate relief in the first half of 2027.

What does 4.85% mean for repayments?

Canstar estimates the November rise adds about $107 a month to repayments on a typical $700,000 loan, and that 2026’s five rises together add about $537 a month (Kane, 2026). The major banks are passing on the increase in full from 13 November (Martin, 2026).

The market is already adjusting. National home values fell 1.2% in October, the seventh straight monthly decline, with Brisbane down 2.0% (Cuthbert, 2026).

How should buyers plan for 2027?

Plan on rates staying high for longer. Base your budget on today’s rate, then test it at 5.10% or higher. If that breaks your cash flow, lower your price ceiling now.

Do not wait for cuts to buy. Even the banks forecasting cuts have them in the second half of 2027 at the earliest. Bullock has also said the Board will not take its lead from market pricing (RBA, 2026a).

Use the leverage while you have it. Cotality’s Tim Lawless says buyers “have a lot more stock to choose from” and more leverage than a year ago (Cuthbert, 2026). That is a negotiating advantage that tends to disappear once rates start falling.

Keep pre-approvals current. Every rise reduces assessed borrowing capacity. Ask your lender or broker to reassess before you make an offer.

Frequently asked questions

What is the RBA cash rate now? 4.85%, set on 3 November 2026.

When is the next RBA meeting? 6 and 7 December 2026.

This article is general information only and does not consider your personal circumstances. Speak to a licensed credit adviser before making borrowing decisions.

References