What the RBA decided on 3 November
The Reserve Bank of Australia raised its cash-rate target from 4.60% to 4.85% on Tuesday, 3 November 2026, an increase of 25 basis points, or 0.25 percentage points. Six Monetary Policy Board members supported the increase and three preferred to keep the rate unchanged.
The decision was released at 2:30 pm AEDT on 3 November. It changes the policy target; it does not set every Australian borrower's home-loan rate to 4.85%.
Why the Board increased the target
The RBA said inflation remained widespread and its updated forecasts showed price pressures lasting longer than previously expected. It now expects inflation to reach the top of its 2% to 3% target range in late 2027. That is the bank's forecast, rather than a guaranteed timetable.
The Board said the revised outlook and risks to inflation justified tighter financial conditions. It did not announce a predetermined sequence of future rate changes.
Variable and fixed home loans respond differently
ASIC's Moneysmart guidance explains that a variable home-loan rate can change, but the lender determines whether to adjust it and by how much. The RBA announcement alone therefore does not establish your lender's new rate, repayment amount or start date.
For a fixed-rate loan, the agreed interest rate stays unchanged during its fixed period. A split loan combines fixed and variable portions. Those distinctions matter when reading a bank's notice: a change to a variable portion is not automatically a change to the whole loan.
Which details to check in a lender notice
Look for the product covered, the new annual rate, its effective date and any revised minimum repayment. The useful comparison is with your own loan agreement and statement, rather than with the cash-rate headline alone.
Moneysmart's mortgage calculator can illustrate repayments at different rates and loan terms. Its switching guide also explains that break fees, discharge fees and other costs can affect a comparison. A rate change by itself does not show that switching loans would save a particular borrower money.
