RBA Lifts the Cash Rate to 4.85% in a 6-3 Vote, the Fifth Rise of 2026 and the Highest Since 2008, as Unemployment Reaches 4.7% and Home Values Sit 4.3% Below Their Peak

The Reserve Bank of Australia (RBA) raised its cash rate target by 0.25 percentage points to 4.85% on Tuesday, November 3, 2026, the day of the Melbourne Cup. It was the fifth increase of 2026 and took the rate to its highest level since 2008. This article draws on two news reports, from SBS News and savings.com.au, which agree on the rate, the vote and the main statements. The RBA's own statement was not retrieved, so its wording is quoted as reported. The reports differ on one detail, the monthly mortgage cost, which is noted below.

The decision and the vote

The board raised the rate from 4.60% to 4.85%. Six members voted to raise it and three voted to hold at 4.60%. SBS notes that the RBA does not disclose how individual members voted. A 6-3 split is narrower than a unanimous decision, and the dissenting votes indicate that a third of the board saw a case for pausing.

What the RBA said

The RBA statement, as quoted by SBS, said: "Inflation remains elevated and recent data indicate that it is broadly based." The board also said, according to savings.com.au, that "a further tightening in financial conditions is warranted."

The RBA now expects inflation to remain elevated through much of 2027 and to reach the top of its 2 to 3 percent target range only in late 2027. SBS reports that this is about three quarters later than previously forecast. Underlying inflation was 3.7% annually in September, according to savings.com.au, and the RBA expects it to stay above 3% through much of 2027.

At the same time, the RBA acknowledged weaker signs. As quoted by SBS, it said: "The economy is slowing, housing prices have fallen significantly and the unemployment rate has risen." Unemployment reached 4.7% in September, its highest in five years.

Governor Michele Bullock

SBS reports that Governor Michele Bullock said the decision is "what's needed to get inflation down." She argued that the rate rises address domestic capacity pressures, not oil prices directly. This is her stated reasoning, and the reports do not provide independent evidence on how much of the inflation is domestic.

Mortgage costs

Two sets of estimates were reported. Canstar, cited by SBS, estimates that a 0.25-point rise adds about $77 a month on a $500,000 loan and about $153 on a $1 million loan, assuming the full rise is passed through. Across all five increases this year, a $500,000 loan costs about $380 more a month. Savings.com.au puts the rise on a $500,000 mortgage at about $80 a month. Neither report explains the difference, and each figure is an estimate that assumes the full rise is passed on.

For median-value homes, REA estimates the monthly increase at $154 in Sydney, $107 in Melbourne, $134 in Brisbane, $119 in Adelaide, $125 in Perth, $112 in Canberra, $97 in Hobart and $83 in Darwin. Actual changes will depend on each borrower's loan, rate and lender.

The housing market

REA data cited by SBS show home values 4.3% below their March peak. Cotality's Tim Lawless described the downturn as demand-driven and possibly record-breaking. The reports do not give a forecast for house prices.

What banks and commentators expected

SBS reports that ANZ forecast a hike and expects cuts to start around November 2027, while CommBank, Westpac and NAB also tipped a rise but expect cuts from around August 2027. In a Finder survey, 75% of experts expected a hike, but only 55% thought it was the right move. Bendigo Bank's David Robertson argued for a pause. These are forecasts and opinions, not decisions.

Politics

Treasurer Jim Chalmers said the decision was widely expected but still difficult for households, and he flagged further budget savings in the December mid-year update. Angus Moore of realestate.com.au said higher mortgage costs will continue to weigh on household spending and slow economic growth.

What the reports do not say

The reports reviewed do not give the RBA's forecasts for growth or unemployment, do not describe the board's discussion beyond the statement, and do not say how the rise will affect savings rates, business lending or insurers. This article therefore makes no claim on those points. The inflation figures also deserve care: the 3.7% underlying rate comes from savings.com.au, while SBS focuses on the RBA's own description of inflation as elevated and broadly based, and the two reports do not give a headline inflation figure to compare it with.

What to watch

The split vote is the most important detail for what comes next, because it shows the board is not united. The bank forecasts quoted above place the first cuts in the second half of 2027, but the RBA itself has not said so, and the reports show it expects inflation to stay elevated for another year. Borrowers on variable rates should check their lender's notices for the exact change to their repayments, and those on fixed rates should note when their terms end.