RBA interest rate decision on Melbourne Cup Day: will rates rise to 4.85% and what it means for your mortgage

By The Rundowns News Desk · Published 1 November 2026

The Reserve Bank's Monetary Policy Board meets on 2 and 3 November, and its decision lands at 2:30pm AEDT on Tuesday 3 November, about half an hour before the Melbourne Cup jumps. After a hotter-than-expected inflation reading, markets expect the cash rate to rise from 4.60% to 4.85%. Here's why, and what it would mean for repayments.

When is the RBA decision?

The RBA's published schedule lists the board meeting for 2 and 3 November 2026. The bank says it issues a media release at 2:30pm after each meeting, and any change to the cash rate target takes effect the following day (RBA). That puts the announcement on Melbourne Cup Day. The race itself starts at 3pm AEDT (see our Cup Day guide).

Where rates are now

According to the RBA's cash rate table, the cash rate target is 4.60%, set at the September meeting (effective 30 September 2026). It's the fourth 0.25-point rise this year, after February, March and May. The board held at 4.35% in June and August. Another rise on Tuesday would be the fifth of 2026, as The Guardian notes.

Why a rise is expected

• Inflation went up, not down. The ABS says annual CPI inflation rose to 4.3% in the 12 months to September, up from 4.0% in August. Trimmed mean inflation, which strips out the biggest price swings, was 3.6%. Both are well above the RBA's 2 to 3% target band.
• Fuel did a lot of the damage. SBS reports the ABS named housing (up 5.2%) as the largest contributor to annual inflation and transport (up 8.7%, on fuel costs) as the second. Greg Jericho at The Guardian calculates that roughly half of September's jump came from fuel.
• The RBA signalled concern. SBS News reports that markets raised their bets on a November hike after comments from deputy governor Andrew Hauser and chief economist Sarah Hunter that inflation was still too high. At Senate estimates, governor Michele Bullock said a key question for the board is "whether the tightening in monetary policy to date will be sufficient to bring inflation back to target in a reasonable time."
• Markets have priced it in. The Guardian reported market odds of a November rise at about 87% after the CPI release, with a move to 4.85% fully priced by December.

Not confirmed: nobody outside the board knows the decision until 2:30pm Tuesday. Market pricing is a forecast, not a guarantee.

The case against

Unemployment is rising. The ABS says the seasonally adjusted rate rose to 4.7% in September, and The Guardian notes it was 4.1% in January. Jericho argues that much of the inflation comes from imported oil prices rather than domestic demand, which a higher cash rate does little to fix. Treasurer Jim Chalmers has also blamed fuel prices driven by the Middle East conflict (SBS).

What a 0.25-point rise means for repayments

If the board lifts the cash rate and your lender passes the full 0.25 points on, the monthly principal-and-interest repayment on a 30-year variable loan going from 6.00% to 6.25% rises by roughly:

• $81 a month on a $500,000 loan
• $97 a month on a $600,000 loan
• $121 a month on a $750,000 loan

These are our own illustrative calculations using a standard amortisation formula and an assumed 6.00% starting rate. Your rate, remaining term and lender's timing will differ. Banks set their own rates and pass-through dates.

Savers would usually see deposit rates edge up, though banks don't always pass rises on in full or straight away.

What's next

We'll update this page after the 2:30pm announcement on Tuesday 3 November. The next big data points are the October labour force figures on 19 November and October CPI on 25 November (ABS release calendar). The board meets again on 7 and 8 December. If you're in Victoria, Cup Day is also the deadline to enrol for the state election.

General information only, not financial advice.