Key takeaways
The RBA raised the cash rate to 4.85% on 3 November, the fifth hike of 2026, in a split six to three vote, and will make its next decision on 8 December 2026.
The RBA now expects inflation to stay above 3% for the coming year, and not to reach the top of its 2–3% target range until late 2027, around three quarters later than it previously forecast.
Unemployment rose to 4.7% in September, and the RBA now expects it to rise by more than it forecast in August.
CBA, NAB and Westpac don't expect another hike in December, while ANZ flags a risk the cash rate reaches 5.10% in December or February.
Following the Reserve Bank of Australia's (RBA) decision to raise the cash rate by 25 basis points to 4.85% on 3 November, the fifth hike of 2026, attention has now turned to its final decision for the year on 8 December 2026.
The latest inflation data released by the ABS on 28 October showed headline CPI rose 4.3% over the 12 months to September, up from 4.0% in August. On the quarterly measure the RBA weighs most heavily, trimmed mean inflation rose 1.0% over the September quarter and 3.7% over the year. The monthly trimmed mean measure was 3.6% over the year to September, up from a revised 3.5% in August. Both measures remain above the RBA’s 2–3% target range.
Attention now turns to the data due before the RBA meets again on 7 and 8 December, including October jobs figures on 19 November and the monthly CPI for October on 25 November.
In its November decision, the Board said inflation remains elevated and broadly based, and that its updated forecasts show it staying above 3% for the coming year and not reaching the top of the 2–3% target range until late 2027. It also judged that domestic capacity pressures are a little tighter than previously thought.
The decision wasn't unanimous: six members voted to raise the cash rate, and three voted to leave it at 4.60%. The Board also noted that the economy is slowing, with housing prices down significantly and the unemployment rate higher. Unemployment rose to 4.7% in September, and the RBA now expects it to rise by more than it forecast in August.
See what each bank is forecasting below.
What are economists predicting for December?
The RBA delivered the November hike that all four majors had forecast, taking the cash rate to 4.85%. For December, CBA, NAB and Westpac don't expect another hike, while ANZ flags a risk of one.
Here's where each of the big four stand on December:
Bank | December view | Cash rate |
|---|---|---|
Pause expected after November | 4.85% (unchanged) | |
Flags a risk of a hike | Up to 5.10% | |
Hold (also expects a hold in February) | 4.85% (unchanged) | |
No further hikes in base case (risk of one, most likely in February, has increased) | 4.85% (unchanged) |
Last Updated: 4pm, 3rd November 2026. Forecasts are subject to change.
ANZ sees more risk of further tightening than the other three. Ahead of the decision, it said there is some risk the cash rate reaches 5.10% in December or February, and estimated that a cash rate of 5.10% would bring inflation back to around 2.5% by mid-2028.
Westpac says further hikes after November are not its base case. Chief economist Luci Ellis said the risk of another increase, most likely in February, has risen, and that Westpac's forecast for December-quarter inflation would give the RBA cover for such a move.
CBA expects the RBA to hold in December and February, after describing the November hike as an "insurance hike" against inflation staying higher for longer. In its 2 November note, it said the risk remains that further tightening is needed in 2027, and that households will bear the brunt of a sharper, longer slowdown.
NAB expects the RBA to pause after November, noting the hike takes the cash rate 150 basis points above the RBA's estimate of neutral (about 3.4%). It says the Bank is still a long way from declaring victory on inflation and the end of the tightening cycle.
The Board said it will be guided by the data and its evolving assessment of the outlook and risks. The RBA will announce its December decision at 2:30pm AEDT on 8 December, and the minutes of its November meeting, due on 17 November, may shed more light on the split vote.
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 4.85% in November, the fifth hike this year, borrowers may be considering how higher repayments 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 December rate decision could mean for borrowers
If the RBA holds
A hold in December would leave the cash rate at 4.85% while the RBA assesses how the economy is responding to this year's five hikes, which have added 1.25 percentage points to the cash rate.
CBA, NAB and Westpac don't expect another hike in December, though ANZ flags a risk of one.
If the RBA hikes again
A sixth increase would take the cash rate to 5.10%, a level not seen 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 aren't fully aligned on the near term: CBA, NAB and Westpac don't expect another hike in December, while ANZ sees a risk of one (see table above).
There's more agreement further out. As of 3 November, CBA, NAB and Westpac each see cuts potentially starting from August 2027, while ANZ sees them starting later, from November 2027. CBA's latest note still has two cuts pencilled in for August and November 2027, though it says the timing is uncertain.
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
After September's hike, 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 applied the increase to variable home loans from 9 October.
Lenders are now working out how much of November's increase to pass on, and when. It's worth watching for your lender's announcement.
If you already have a home loan, your variable repayments will likely have risen from 9 October if your lender passed on September's hike, and may rise again once your lender confirms what it will do with November's increase.
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 again in September, price pressures remain uneven across household expenses.
Housing was again the largest contributor to annual inflation, rising 5.2% over the year to September, down from 5.7% in August. New dwelling prices rose 4.7%, while electricity costs rose 12.8%, largely because Commonwealth electricity rebates ended over the year.
Transport was the second-largest contributor, rising 8.7% due to higher automotive fuel prices. Fuel rose 9.4% in September alone, driven by higher world oil prices, after a 14.8% rise in August. Food and non-alcoholic beverages rose 3.2%, with meals out and takeaway the main contributor.
For households, the rise in headline CPI doesn't mean all cost pressures are worsening evenly. The trimmed mean strips out the biggest price swings, and fuel was one of them in September, a key reason headline inflation (4.3%) is running well above underlying inflation (3.6%). The RBA remains focused on underlying inflation, which rose to 3.6% in September from a revised 3.5% in August.
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.
