The Reserve Bank of Australia has raised its cash rate target by 0.25 percentage points to 4.85%. The decision was announced at 2:30pm AEDT on Tuesday, 3 November 2026, and takes effect on Wednesday, 4 November. For variable-rate mortgage holders, repayments could rise if their lender passes on some or all of the increase. The change does not mean every home loan automatically becomes 4.85%. Source: RBA official November decision.
Updated 3 November 2026 after the RBA decision; replaces the pre-decision scenario in the original guide. Calculations are illustrative, not personalised lender quotes. Featured image: original high-resolution licensed photograph of suburban rooftops credited to Maximillian Conacher / Unsplash; not a photograph of today’s RBA meeting.
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What did the RBA decide on 3 November?
The Monetary Policy Board increased the cash rate target from 4.60% to 4.85%, its fifth increase of 2026 and its highest level since 2008. The decision was split: six members supported the rise while three preferred to leave the rate unchanged. The RBA said inflation remained too high and it was focused on returning inflation sustainably to its 2–3% target. RBA announcement and ABC report on the vote.
The cash rate is an overnight interbank benchmark, rather than a typical retail mortgage rate. Banks decide whether and when to adjust their variable home-loan rates. For the official effective dates and prior moves, see the RBA cash-rate history.
How much more could a mortgage cost each month?
A useful way to estimate the change is to hold the loan balance and remaining term constant and raise the assumed mortgage rate by 0.25 percentage points. The following examples use a principal-and-interest loan, a 25-year remaining term, and an illustrative interest-rate increase from 6.00% to 6.25%. They assume the lender passes on the entire rise and recalculates the scheduled monthly repayment.
| Loan balance | Before / month | After / month | Extra / month | Extra / 12 months |
|---|---|---|---|---|
| $300,000 | $1,933 | $1,979 | +$46 | +$553 |
| $400,000 | $2,577 | $2,639 | +$61 | +$738 |
| $500,000 | $3,222 | $3,298 | +$77 | +$922 |
| $600,000 | $3,866 | $3,958 | +$92 | +$1,106 |
| $750,000 | $4,832 | $4,948 | +$115 | +$1,383 |
| $800,000 | $5,154 | $5,277 | +$123 | +$1,475 |
| $1,000,000 | $6,443 | $6,597 | +$154 | +$1,844 |
Under these assumptions, a $600,000 mortgage would rise from approximately $3,866 to $3,958 a month, an extra $92 each month or around $1,106 over 12 months. A $750,000 balance would increase by about $115 a month. The table is a scenario, not a forecast of what any particular bank will do. The annual amount is calculated from unrounded monthly values, so it may differ from multiplying the displayed rounded difference by 12.
These figures use the standard amortising-loan repayment formula with the rate divided into monthly periods and 300 remaining repayments, excluding fees, offsets, additional repayments, interest-rate discounts and future rate changes. You can model your specific loan with ASIC Moneysmart’s mortgage calculator.
Does your bank have to pass on the 0.25-point increase?
No. Each lender sets its own interest rates and the date of any change. A full pass-through of the cash-rate increase would raise a 6.00% variable mortgage rate to 6.25%, but other pass-through decisions are possible. The rate quoted by the RBA is not your personal lending rate. Check the notice from your bank, the effective date, your loan balance and whether the required minimum repayment has actually been recalculated.
For a borrower on a fixed-rate loan, the agreed fixed rate generally remains unchanged until the end of that fixed period. For interest-only loans, a 0.25-point rise applied to a $600,000 balance would add approximately $125 a month in interest, while the balance and interest-only structure remain unchanged. That differs from the $92 principal-and-interest example.
Why did the RBA raise rates despite weaker housing?
The RBA’s November policy assessment says inflation is still too high and likely to stay elevated for longer. Higher fuel prices, broader domestic cost pressures and persistent inflation expectations complicate the outlook. At the same time, the RBA acknowledges housing prices have declined, spending is slowing and unemployment is expected to increase. The central bank’s central forecast does not return inflation to the middle of its 2–3% target range until around mid-2028. Source: RBA November 2026 Statement on Monetary Policy.
A rate rise works with a lag: borrowers and savers see different effects, and full economic adjustments can unfold over many months. It would be misleading to say the RBA has guaranteed another hike or that a cut is imminent. Subsequent decisions depend on inflation, jobs, spending and other incoming data.
What happens next for Australian mortgage holders?
The RBA’s next scheduled decision is on 8 December 2026. The key near-term question for borrowers is which lenders change their variable rates, by how much and when. Changes to savings rates may also differ between institutions. Monitor communications from your bank rather than assuming every lender will move on the RBA’s effective date.
Borrowers comparing refinancing offers should check comparison rates, exit or establishment fees, offset and redraw features, serviceability rules and whether lower quoted repayments simply reflect a longer loan term. An apparently lower monthly figure can cost more in total interest if the loan is stretched out.
What if higher repayments make your mortgage unaffordable?
Contact your lender’s hardship team promptly and ask about support or a hardship variation. Options can include a temporary payment arrangement, although some may increase longer-term interest costs. ASIC Moneysmart explains financial-hardship requests, complaints and independent help. The National Debt Helpline provides free financial counselling on 1800 007 007. Do not ignore a repayment notice or wait until arrears compound.
What does the rate rise mean for Australian house prices?
Higher borrowing costs can constrain buying power and demand, but a single interest-rate decision does not translate into a uniform percentage change in house prices. Across Australian markets, supply, employment, local affordability and buyer sentiment all matter. For practical due diligence in a falling market, see NextNews’s 2026 home-buying checklist.
What should you check before your next repayment?
- Confirm your lender’s actual new variable rate and its start date.
- Check whether your repayment or interest/principal allocation has changed.
- Recalculate your own balance and remaining term rather than copying example figures.
- Review your household budget and available offset savings before making financial decisions.
- Contact your lender early if you expect difficulty meeting repayments.
How will this rate rise affect your household? Are you reviewing your mortgage, planning to buy or waiting for more clarity on interest rates? Share your experience in the comments.
Sources and disclosure
Primary sources: RBA rate decision, 3 November 2026; RBA November 2026 economic outlook; RBA cash-rate history; ASIC Moneysmart mortgage calculator; ASIC Moneysmart hardship guidance; and ABC reporting on the RBA vote.
Disclosure: Prepared with AI assistance and checked against the cited sources. Repayment calculations use clearly stated hypothetical assumptions and are not a forecast, lender offer or personalised financial advice. Mortgage terms, bank rates and the economic outlook can change. The accompanying photograph is illustrative rather than a record of the November meeting. See the NextNews website disclaimer for general terms.
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