The Reserve Bank raised the cash rate by 0.25% on Tuesday 3 November 2026, from 4.60% to 4.85%. It’s the fifth rise this year, so the cash rate is now 1.25% higher than it was in January. CommBank, Westpac, NAB and ANZ are all passing the full rise on to variable home loans from Friday 13 November.
If you have a variable loan, that’s another increase to absorb on top of four others, and right before Christmas. So I’ll keep the news part short and spend most of this post on the numbers and what you can do about them.
Why did the RBA raise rates again?
Inflation is still running too hot. Prices rose 4.3% over the year to September, up from 4.0% in August, and the trimmed mean, the measure the RBA watches most closely, rose 1.0% for the quarter.
The RBA’s statement said “inflation remains elevated and recent data indicate that it is broadly based”, and that its inflation outlook has been “revised materially higher”, partly because of fuel and other commodity prices affected by the conflict in the Middle East.
It wasn’t a unanimous call. Six board members voted to raise and three voted to hold. The RBA also said that “the economy is slowing, housing prices have fallen significantly and the unemployment rate has risen”, so the board knows these rises are biting. We wrote about the March and May rises at the time.
How much will my repayments go up?
Here’s what this rise, and the five rises this year combined, adds to a variable principal and interest loan over 30 years. To keep it simple, the example uses a rate that goes from 6.25% to 6.50% this month and was 5.25% in January.
| Loan balance | This rise (+0.25%) | All of 2026 (+1.25%) |
|---|---|---|
| $500,000 | +$82 a month | +$399 a month |
| $700,000 | +$114 a month | +$559 a month |
| $1,000,000 | +$164 a month | +$799 a month |
Illustrative estimates only. Your change depends on your balance, remaining term and your lender’s actual rate.
Our repayment calculator works it out for your own balance and rate.
Most people can absorb one rise of $100 or so. The trouble is they keep piling up. On a $700,000 loan you’d now be paying around $6,700 a year more than in January, out of the same pay packet.
How much less can I borrow?
Every rise also cuts how much a lender will let you borrow, because they test whether you could still make the repayments at a rate about 3% above the one you’d actually pay. As a rough guide, assuming your income and living costs stay the same:
| Borrowing power before | After this rise | After all of 2026 |
|---|---|---|
| $500,000 | about $11,000 less | about $53,000 less |
| $750,000 | about $16,000 less | about $80,000 less |
| $1,000,000 | about $22,000 less | about $107,000 less |
Illustrative estimates only. Each lender works out borrowing power its own way.
If you’re buying, this is the number to watch. A pre-approval from earlier in the year may not stretch as far as it did, so it’s worth having it re-checked before you bid. Our borrowing power calculator gives a quick first look.
When does the rise reach my loan?
The big four have all announced the full 0.25% for variable home loans, effective Friday 13 November 2026. Other lenders tend to follow over the next few weeks. Your lender will write to you with the new repayment and the date it starts.
Fixed rate loans don’t change until the fixed period ends. After that you’ll move onto the lender’s variable rate, which now includes this rise, so if yours ends soon, expect a jump.
Will rates keep going up?
Maybe once more, but most of the rises are probably behind us. The bigger change is that rates aren’t expected to come back down for a long time.
The RBA’s November forecasts use market pricing for the cash rate, and they have it peaking at about 4.9% by mid-2027. That’s roughly one more 0.25% rise at most from today’s 4.85%. After that the forecasts hold it at about 4.8% right through to the end of 2028, so markets aren’t expecting any real cuts in the next two years.
The reason is inflation. The RBA expects it to be 4.5% by December and not back in the middle of its 2 to 3% target until mid-2028. Until it gets there, the RBA has little room to cut.
The next decision is on Tuesday 8 December. For your own budget, I’d plan on today’s rate, plus one more rise, staying in place for at least the next two years. If it turns out better than that, the extra goes straight into your offset.
Should I fix my rate now?
That depends on what you could cope with if rates kept rising. Fixed rates already take into account where markets think rates are heading, so fixing isn’t automatically cheaper. It’s worth working out the point where your repayments would stop being affordable, and whether there’s a fixed rate below it.
What you can do now
You can’t change what the RBA does, but you can change what you’re paying and how your loan is set up.
- Get your rate reviewed. If nobody has looked at it in the last six months, there’s a good chance you’re paying more than a new customer would. Ask your lender to reprice first, then compare against the market. Our refinance calculator shows what a lower rate is worth in dollars.
- Use your offset. Every dollar sitting in an offset account saves you interest at your home loan rate, so even a small buffer there helps.
- Look at the structure if the repayment itself is the problem. A longer loan term or a period of interest-only can lower the monthly amount. I’d be doing a bad job if I didn’t say they cost more in interest over the life of the loan, so they work best as a short-term fix with a plan to get back on track. If credit cards or a car loan are adding to the squeeze, rolling them into your home loan can lower the total you pay each month.
- Call your lender early if you’re worried. If you think you might miss a payment, ring before it happens, not after. You have a legal right to ask for a hardship arrangement, and lenders have more options when you call early.
The bottom line
- Check when your new repayment starts and make sure the money’s there.
- If your rate hasn’t been reviewed this year, ask for it now.
- If you’re buying, have your borrowing power re-checked before you make an offer as the amount you can borrow will most likely have changed
If you’d like us to run the numbers on your loan, get in touch and we’ll take a look.
This article is general information only and doesn’t take your personal circumstances into account. Figures are illustrative. Speak to a broker or financial adviser before making a decision.