RBA reveals Melbourne Cup Day 2026 cash rate call

Today (3 November), the RBA board decided to again increase by 25 basis points, bringing the cash rate to 4.85 per cent.

The decision was decided by majority; six members voted to increase the cash rate target by 25 basis points to 4.85 per cent; three members voted to leave the cash rate target unchanged at 4.60 per cent.

In a statement, the board said: "Since the previous meeting, the data have confirmed that underlying inflation remains broadly based. Capacity pressures appear a little tighter than previously estimated and there are indications that higher fuel prices are being passed through to prices of other goods and services. Inflation is now expected to remain above 3 per cent for the coming year and there is an increasing risk that higher inflation expectations will become embedded."

"The Board is conscious of the period in which inflation has been too high. Given the revised inflation outlook and the continuing upside risks, the Board judged that a further tightening in financial conditions is warranted to support the return of inflation to target," it said.

"The Board will continue to do what it considers necessary to bring inflation sustainably back to target. Accordingly, the Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. Monetary policy is well placed to respond to developments, and the Board is focused on its mandate to deliver price stability and full employment."

In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes said that today’s cash rate hike to 4.85 per cent was “not the outcome we had hoped for, but it was widely anticipated after September’s inflation figures were higher than expected”.

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“Every 25-basis point (0.25 per cent) increase adds approximately $160 per month to repayments on a $1 million mortgage and can reduce borrowing capacity by around $30,000 to $40,000. Across this year’s five hikes, that’s roughly $800 a month more,” he said.

“Residential home loan rates are currently sitting around 6.14 per cent to 6.79 per cent, depending on the lender, loan size, LVR and borrower profile. After today’s hike, banks will likely increase these by 0.25 per cent over the coming weeks.”

“If you haven’t reviewed your home loan this year, now is a good time to take a look,” Haynes said.

“After five rate hikes this year, your current rate may no longer be as competitive as what’s available in the market. Refinancing may provide an opportunity to secure a more competitive rate, reduce repayments or access equity for other goals, depending on your circumstances.”

The property market, Haynes added, is shifting.

“National home prices have fallen for six consecutive months, with prices now below their March 2026 peak. More listings, longer selling times and greater vendor discounting are also giving buyers more room to negotiate,” he said.

“For those looking to enter the property market, these conditions may create more opportunities to find the right property and negotiate on price.”

The path for future rate movements will continue to depend on how inflation develops, Haynes advised, “so there is still some uncertainty around what comes next”.

“Legal professionals can access certain market advantages that can make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for lawyers to gauge what’s best for your individual situation,” he said.

“Legal Home Loans currently have a $500 refinance rebate offer live until December 31, and it can be combined with eligible Law Society rebates and lender cashback offers.

“Contact us to learn more.”