Key takeaways
The RBA raised the cash rate to 4.60% on 29 September, the fourth hike of 2026, and will make its next decision on 3 November 2026.
Annual inflation rose to 4.0% in August, up from 3.5% in July, while trimmed mean inflation held at 3.6% for a third straight month.
ANZ and Westpac both expect a fifth hike in November, taking the cash rate to 4.85%.
CBA and NAB expect the RBA to hold, though neither rules out a hike.
All four majors will pass September's hike on in full from 9 October, ending sub-6% variable rates among the big four.
Following the Reserve Bank of Australia's (RBA) decision to raise the cash rate by 25 basis points to 4.60% on 29 September, the fourth hike of 2026, attention has now turned to its next decision on 3 November 2026.
Fresh inflation data released by the ABS on 30 September showed headline CPI rose 4.0% over the 12 months to August, up from 3.5% in July, a touch softer than economists had expected. Trimmed mean inflation, the measure the RBA weighs most heavily, held at 3.6% for a third consecutive month. Both measures remain above the RBA's 2–3% target range.
The August figures are the first inflation read since the September hike, and the last monthly release before September-quarter CPI lands on 28 October, just days ahead of the RBA's November meeting.
In its September decision, the Board said some of the upside risks to inflation it had flagged in August were "materialising," and left the door open to raising the cash rate further if needed.
The major bank outlook has split since the hike. ANZ and Westpac both expect a fifth increase in November, while CBA and NAB expect the Board to hold, though neither has ruled out a move. See what each bank is forecasting below.
The August inflation data hasn't settled the debate. Headline inflation picked up, but the softer-than-expected print eased some of the pressure for an immediate follow-up hike, while trimmed mean's third straight month at 3.6% keeps the case for one alive.
What is the RBA cash rate?
The RBA cash rate is the interest rate set by the Reserve Bank of Australia for overnight loans between banks. It influences the cost of borrowing across the economy, including many variable home loans and savings products.
When the cash rate moves, lenders review their own interest rates. However, each lender makes independent decisions about if, when and how much they adjust.
What are economists predicting for November?
The outlook has split since the RBA's September hike, with the big four now evenly divided on whether a fifth increase follows in November.
The September hike was unanimous, with the Board's statement noting that some of the upside risks it flagged in August were materialising, and that it would increase the cash rate further if needed.
The August inflation data has done little to settle what comes next. Headline CPI rose to 4.0%, a touch softer than economists had expected, while trimmed mean has now held at 3.6% for three straight months. Here's where each of the big four currently sit on November:
Bank | November Forecast | Cash rate if realised |
|---|---|---|
Hold (hike flagged as a risk, not the base case) | 4.60% (unchanged) | |
Hike (25bp) | 4.85% | |
Hold (hike flagged as "live," not the base case) | 4.60% (unchanged) | |
Hike (25bp) | 4.85% |
ANZ has had a November hike in its forecast since late August, and says the August data hasn't changed that. ANZ Research noted that trimmed mean came in slightly softer than expected for the month, but that the detail is consistent with its forecast of around 1% for the September quarter, which it would view as a material upside surprise against the RBA's own August forecasts. It still sees a November hike, taking the cash rate to 4.85%, as "more likely than not."
Westpac has now joined ANZ in forecasting a follow-up hike in November, having brought its call forward to September last month. Chief economist Luci Ellis said the Board's language and unanimous vote lowered the bar for a follow-up move, making a November hike the base case unless the Middle East conflict is resolved or energy costs fall significantly. Westpac sees the bar for any hike beyond November as much higher.
CBA and NAB are both holding to a pause as their base case, but neither rules out a hike. CBA economists said the Governor's press conference suggested the hurdle for another increase is now higher, but called the decision "finely balanced" and dependent on September-quarter CPI, the labour market, household spending and the conflict in the Middle East.
NAB's chief economist Sally Auld pointed to the Governor's repeated emphasis on preserving labour market gains while bringing inflation down, which NAB reads as a sign the Board may be done tightening for now. NAB continues to forecast a hold, with the risk that further tightening may be required.
September-quarter CPI, released 28 October, along with labour market data, will shape the RBA's 3 November decision.
What borrowers are seeing right now
Borrowers are continuing to review their budgets, borrowing capacity and loan structures as interest rates remain elevated.
Following the RBA's decision to raise the cash rate to 4.60% in September, borrowers may be considering how higher repayments, which flow through from 9 October for variable loans, could affect their finances and future property plans.
Some borrowers are reviewing whether a fixed, variable or split home loan better suits their circumstances, while others are exploring refinancing or checking whether their current rate remains competitive.
Higher interest rates can also reduce borrowing capacity, which may influence how much buyers can borrow and the types of properties they consider.
You might also be interested in: What is a serviceability buffer and how does it affect your home loan?
What a November rate decision could mean for borrowers
If the RBA holds
A hold in November would leave the cash rate at 4.60% while the RBA assesses how the economy is responding to September's hike, the fourth of 2026.
The August inflation figures give the Board more to weigh: headline inflation accelerated, but came in under consensus, and underlying inflation has now held steady for three months.
These forecasts remain subject to change as the RBA considers incoming inflation, labour market and household spending data.
However, lenders make their own interest rate decisions. Home loan rates can still change even when the RBA leaves the cash rate unchanged.
If the RBA hikes again
A fifth increase would take the cash rate to 4.85%, the highest level since 2008, adding further pressure on borrowers already managing higher repayments and living costs.
Persistently high underlying inflation would be one factor that may increase the case for further tightening, although the RBA has said it will assess incoming data and the evolving balance of risks.
Even relatively small changes in interest rates can affect both repayments and borrowing capacity. Higher rates may also lead some buyers to reconsider budgets, property types, or preferred locations.
If the RBA cuts later in 2027
A future cut remains possible, but the big four are no longer aligned on the near-term path: ANZ and Westpac expect one more hike in November, while CBA and NAB expect the Board to hold (see table above).
There's more agreement further out. CBA, NAB and Westpac each see cuts potentially starting from August 2027, while ANZ, with the higher forecast peak, sees them starting from November 2027. CBA expects two cuts in 2027, in August and November.
These remain forecasts and could change as new economic data becomes available. Any future reductions passed on to borrowers would remain at each lender’s discretion.
Wondering whether interest rates could rise again this year and what that might mean for you? Read our guide on whether interest rates will rise and what you can do to prepare.
Banks may not pass on future RBA moves in full
Even when the RBA adjusts the cash rate, lenders are not required to pass on the full change. Some may move earlier, later, by a smaller amount or by more than the RBA change.
If you’re unsure how any move applies to you, reviewing your loan can bring clarity.
You might also be interested in: Which banks have passed on the RBA’s latest interest rate?
More lenders are competing for borrowers
With the hike now confirmed, lenders moved quickly to pass it on. CBA was first to confirm its full 0.25 percentage point increase on 30 September, with Westpac, NAB and ANZ following shortly after. All four apply the increase to variable home loans from 9 October.
The move ends sub-6% variable rates among the big four. Westpac's lowest rate rises from 5.99% to 6.24%, while the other three majors now start between 6.29% and 6.50%, with CBA's lowest rate at 6.34%.
The changes highlight that lenders aren't required to pass on an RBA move in full, or at all, though in this case all four majors matched it exactly. Competition, funding costs and individual lender strategies can still shape the rates available outside the big four.
Some lower rates may also be limited to new customers and are subject to individual lender eligibility requirements. Existing borrowers may need to negotiate with their lender or refinance to access a more competitive rate.
If you already have a home loan, your variable repayments will likely rise from 9 October if your lender has passed on the hike. It's worth checking your latest statement and comparing your rate against what's on offer elsewhere.
If you're planning to fix your rate, fixed rates already reflect the higher cash rate, so it's worth comparing current fixed offers against variable before deciding.
If you're planning to buy, higher variable rates reduce borrowing power across the board. It's worth getting a clear picture of what you could borrow now, rather than assuming pre-hike numbers still apply.
If you haven't reviewed your home loan recently, comparing your current rate with what's available may help you understand whether there are more competitive options for your circumstances.
Cost of living pressures remain in focus
While annual headline inflation rose in August, price pressures remain uneven across household expenses.
Housing was again the largest contributor to annual inflation, rising 5.7% over the year to August, up from 5.0% in July, driven by both new dwelling costs and electricity. New dwelling prices rose 5.4%, while food and non-alcoholic beverages eased slightly to 3.0%.
Transport was the second-largest contributor, rising 5.6% due to higher automotive fuel prices, a sharp jump from July's 1.6%.
For households, the rise in headline CPI doesn't mean all cost pressures are worsening evenly. The RBA remains focused on underlying inflation, which has now held at 3.6% for three straight months.
Higher interest rates can flow through to mortgage repayments, rents and business costs. For many households, that adds to existing cost of living pressures.
Even small rate movements can make a difference. Reviewing your loan structure, repayment strategy and household budget can help you stay prepared.
In some cases, borrowers may also look at strategies like debt consolidation to help manage repayments. This involves combining multiple debts into a single loan, which may reduce overall monthly repayments depending on the structure and interest rate.
You can learn more about how this works in our guide to debt consolidation.
What the next RBA decision could mean for you
While economists debate the next move, it can help to think about what different outcomes could mean for your own plans.
If the RBA… | What you might want to think about |
|---|---|
Raises rates | • Review your borrowing power. Higher rates can reduce how much you can borrow. |
Holds rates | • A pause can be a good time to review your loan and borrowing capacity. |
Cuts rates | • Lower rates could increase borrowing power and reduce repayments. |
If you’re unsure what the next RBA move could mean for your situation, an Aussie Broker can help you review your options and plan your next step.
Tips to prepare for possible rate changes
• Review your current rate and repayment amount
• Check when you last refinanced or negotiated with your lender
• Build or maintain a buffer where possible
• Consider whether fixed, variable or split options suit your situation
• Talk to an Aussie Broker if you’re unsure what’s right for you
With over 1,000 Aussie Brokers across 200+ stores, we can help you understand your options and feel confident about your next step.
Need help reviewing your home loan?
If you’re unsure how a rate hold, hike or future cut could affect you, an Aussie Broker can help you understand your options.
We’ll look at your current rate, loan structure and goals, and help you decide whether refinancing, restructuring or staying put makes sense for your situation.
You can get in touch online, over the phone, or by visiting an Aussie store near you.
Book a free^ chat with an Aussie Broker to review your current loan and explore your options.
