Key takeaways
The RBA increased the cash rate by 0.25 percentage points to 4.85% at its November 2026 meeting, the fifth rise in 2026.
If lenders pass on the full increase, repayments could rise for some borrowers and estimated borrowing capacity may fall.
A $750,000, 30-year owner-occupier loan could cost about $125 more per month, or around $1,496 more per year, if the lender passes on the full 0.25 percentage-point increase.
After five rate rises this year, reviewing your home loan with an Aussie Broker could help you understand your options.
The Reserve Bank of Australia (RBA) has increased the cash rate by 0.25 percentage points to 4.85% at its November 2026 meeting.
The decision marks the fifth rate rise in 2026, following four increases earlier in the year. At 4.85%, the cash rate is now at its highest level since late 2008.
Rate rises may increase repayments for borrowers if their lender passes on some or all of the change. Lenders can set their own timing and pricing, so the effect will vary by lender, loan and borrower circumstances.
If you have a home loan, are thinking about refinancing or are planning to buy, you may want to work out how this increase could affect your repayments, borrowing power and plans.
Why did the RBA raise rates in November?
Inflation remains above target
According to the ABS, annual CPI inflation rose to 4.3% in September, up from 4.0% in August, while trimmed mean inflation increased to 3.6%, from a revised 3.5% in August. Both measures remained above the RBA's 2-3% inflation target range.
Ahead of the November decision, independent economist Nicki Hutley said the RBA was weighing higher inflation against signs of a slowing economy.
“There are forces pulling in both directions. But taking what both Andrew Hauser and Sarah Hunter have said in speeches in the last week, it’s ‘We’re not done yet,’ kind of thing.”
In its November statement, the RBA said underlying inflation remained broadly based, capacity pressures appeared a little tighter than previously estimated and higher fuel prices were being passed through to the prices of other goods and services.
With inflation now expected to remain above 3% for the coming year, the Board judged that a further tightening in financial conditions was warranted and increased the cash rate target by 0.25 percentage points to 4.85%.
The RBA remains focused returning inflation to target
The RBA said inflation is expected to remain above 3% for the coming year, increasing the risk that higher inflation expectations could become embedded.
The Board said it would continue to do what it considers necessary to bring inflation sustainably back to target, while remaining attentive to incoming data and the evolving outlook and risks.
What a rate rise could mean for your repayments
If a lender passes on the full 0.25 percentage-point increase, repayments on a variable home loan may rise.
Hutley acknowledged the potential pressure of another increase on households: "A fifth rate rise is going to be hard for many households.”
The example below uses a $750,000 owner-occupier loan over 30 years with principal and interest repayments.
Example loan | Estimated additional cost |
|---|---|
$750,000 | ~$125/month or ~$1,496/year more |
What a rate rise could mean for borrowing power
Higher interest rates may reduce estimated borrowing capacity, although the effect depends on lender criteria and individual circumstances.
Aussie Buyer's Agent Reece Dalton said another rate rise could make it more difficult for some first home buyers to enter the market.
“If rates rise and their borrowing capacity is affected, that could potentially push them out of the market for another six to 12 months, which isn't good for the marketplace itself.”
The November scenario uses a 3.00 percentage-point serviceability buffer and a $750,000 base borrowing capacity.
Example borrowing capacity | Estimated reduction |
|---|---|
$750,000 | ~$15,900 |
What a rate rise could mean for you
Interest rate increases can affect borrowers differently depending on where they are on their property journey.
Aussie Buyer's Agent in Victoria Daniel Bennett said the impact of a rate rise could vary depending on how close buyers are to their borrowing limits.
“Most of my purchases aren’t really buying at their absolute limit, so a rise here or there isn’t going to throw them out too much.”
Here are a few things different borrowers may want to consider.
Borrower type | What you can do if rates change |
|---|---|
First home buyers | - Check your current borrowing capacity before making an offer, as higher rates may affect how much you can borrow. - Review your budget and consider what repayment level would be manageable for you. - Conditional pre-approval may help you understand your position, subject to lender assessment and any changes in circumstances. |
Investors | - Review rental income, loan repayments, and cash flow against higher borrowing costs. - Compare investment loan rates, as pricing can vary between lenders. |
Refinancers | - Check whether your lender passes on the rate rise in full and when it takes effect. - Compare your rate with what new borrowers are being offered, while checking eligibility and fees. - Reviewing your loan or refinancing may help you understand whether a different rate or loan feature suits your circumstances. |
What choices could you make now?
A rate rise could increase repayments for borrowers whose lenders pass on some or all of the change, while prospective buyers may also see their estimated borrowing capacity change.
The impact will depend on the loan, lender, and individual circumstances.
For borrowers considering their next move, this may be a good time to:
Review your current interest rate and home loan features.
Compare refinancing options, including any fees and eligibility requirements.
Reassess your borrowing capacity before making property decisions.
Check whether your budget could accommodate future rate movements.
Speak with an Aussie Broker about strategies that may suit your circumstances.
While today's decision may require some borrowers to reassess their plans, understanding your options can help you make informed decisions with greater confidence.
Rate Radar can help you keep an eye on your home loan rate
If you already have a home loan, Rate Radar in the Aussie app can monitor your rate over time and alert you when a change or rate may be worth a closer look, based on your savings target set in the app.
From there, an Aussie Broker can help you compare whether negotiating or refinancing may suit your circumstances.
Set up Rate Radar in the Aussie app today to keep an eye on your rate and be alerted when an option worth considering appears.
A rate rise doesn't mean you have no options
Higher repayments or a change in estimated borrowing capacity may prompt some borrowers to review their loan, compare available rates, and check whether their current structure still suits their circumstances.
Independent economist Cameron Kusher said higher interest rates could also affect buyer demand and negotiations.
“Again, it is very early so it is hard to tell but I expect we'll see fewer buyers and much more power in negotiations shifting to the purchaser and away from the vendor.”
Any potential benefit will depend on eligibility, lender pricing, fees and individual circumstances.
Rather than trying to predict the next RBA move, borrowers may find it useful to understand how the November increase could affect their own repayments and borrowing position.
If you're keeping an eye on future rate movements from our lender panel, our Interest Rate Tracker provides ongoing updates on RBA decisions, forecasts and what they could mean for borrowers.
You can also check out Aussie’s Low Rates Roundup for a regular look at selected home loan rates from our lender panel. Rates, eligibility and loan features vary, so it’s worth checking what may suit your circumstances.
When rates rise, it helps to have someone on your side. Whether you're buying, refinancing or checking in on your current loan, an Aussie Broker can help you make sense of your borrowing power, explore your loan options, and plan ahead with your goals in mind.
