RBA Hikes Cash Rate to 4.85%, an 18-Year High in Nov 2026

The Reserve Bank of Australia raised its cash rate 25 basis points to 4.85% on November 3, 2026, pushing the benchmark to its highest level since late 2008. Australia's central bank raised its cash rate to an 18-year high on Tuesday in its fifth hike of the year, though a surprisingly narrow 6-3 vote signaled policymakers may be nearing the end of their tightening campaign.

What the RBA decided

The nine-member Monetary Policy Board delivered the increase on a Melbourne Cup Day meeting, taking the cash rate from 4.6 per cent to 4.85 per cent. The cash rate has not been this high in Australia since late 2008, meaning current mortgage and savings rates mirror levels last seen during the global financial crisis. The RBA pointed to elevated inflation, the war in the Middle East and rising oil prices as the drivers of the decision, and in its statement warned that "there continue to be heightened uncertainties about the outlook for domestic economic activity and inflation."

Why the vote split and the inflation numbers matter

The size of the move was expected, but the vote count was not. Thirty of 32 economists polled by Reuters expected a hike, while markets implied an 88% chance of a move after hot third-quarter inflation data and hawkish commentary from policymakers eclipsed concerns about unemployment climbing to a five-year high. Even so, the board was far from unanimous: the decision passed on a 6-3 vote, a narrower margin than earlier hikes this year, which some economists read as a signal the tightening cycle is close to its peak. The RBA also removed a reference to increasing the cash rate further if needed from its post-meeting statement.

The inflation backdrop explains the board's reluctance to pause. Underlying inflation accelerated to a two-year high of 3.7% in the third quarter, after spending more than five years above the central bank's 2% to 3% target band. At the same time, the labour market has also softened, with the unemployment rate hitting a five-year high of 4.7%, but the central bank still judges it to be a little tight and a source of inflationary pressures. That combination, an economy slowing but inflation still running hot, is why the RBA kept hiking even as job losses mount.

Key figures

What it means for mortgage holders

For a borrower with a typical $500,000 variable-rate loan, this single increase adds roughly $77 more a month, while someone with a $1 million loan could face an extra $153 a month in repayments, according to Canstar's analysis. That figure covers only the November move. Looking at the full run of hikes this year, Domain reported that Australians with the average home loan size of $730,719 will have to pay $538 more per month, $6,460 more per year, since the cash rate increases began this year. The two numbers answer different questions: the Canstar figure isolates the marginal cost of today's decision, while the Domain estimate shows the cumulative toll of the year's five hikes on an average-sized loan. Readers should use the first to judge the immediate hit to their next repayment and the second to gauge how much their total repayment burden has grown since January.

For context on how unusual the current setting is, the last time the RBA raised rates on Melbourne Cup Day was in 2023, when it lifted the cash rate by 25 basis points to 4.35 per cent. That move was itself a 12-year high at the time. The fact that the cash rate has climbed half a percentage point further since then, to a level not seen since 2008, underscores how much longer and steeper this tightening cycle has run compared with the one three years earlier.

What's next

The RBA's own statement did not commit to further increases, having dropped language about hiking further if needed. The board's next opportunity to adjust the cash rate falls at its following scheduled meeting, listed on the Dec 8, 2026 RBA Board Meeting calendar. Whether that meeting brings a sixth hike, a pause, or the start of an easing cycle will depend on how the next inflation and jobs data land between now and then. Nothing in the sources reviewed here commits the RBA to a specific path beyond that date.