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Reserve Bank lifts cash rate to 4.85 per cent as banks hike mortgage rates

Australia's Reserve Bank raised the cash rate to 4.85 percent on Melbourne Cup Day, prompting major banks to hike mortgage rates.

Updated 3 min read

Published by Agyata NewsroomEditorial policyCorrections

Key points

  • Reserve Bank of Australia raised the cash rate to 4.85 percent on Melbourne Cup Day.
  • Governor Michele Bullock stated the decision makes households feel poorer due to a supply shock.
  • Average mortgage holders now pay $584 more per month after five rate hikes this year.

Why it matters. The rate hike forces households to pay significantly more on mortgages, potentially making them feel poorer as incomes do not grow quickly enough to offset the costs of a supply shock.

Updated Sources: Thewest, Afr, ABC News & Headlines – Australian Broadcasting Corporation, Reserve Bank of Australia

On Melbourne Cup Day, Australia's Reserve Bank raised the cash rate to 4.85 percent, marking the fifth increase this year and the highest level in 18 years. Compare the Market economics director David Koch advised households to review bills like energy and insurance to offset the higher costs. Governor Michele Bullock warned that the move would make Australians feel poorer due to a massive supply shock and lack of productivity growth.

Latest updates

Reserve Bank lifts cash rate to 4.85 per cent as banks hike mortgage rates

The Reserve Bank of Australia lifted the cash rate for the fifth time this year, bringing it to 4.85 per cent, its highest level in 18 years. This decision has led to significant hikes in mortgage rates, prompting economic experts to urge frustrated homeowners to fight back. The move reflects the ongoing struggle to control inflation while managing the impact on households. Mortgage holders are now advised to adopt a back-to-basics approach to manage their finances. The situation highlights the delicate balance between monetary policy and economic stability.

Thewest

Reserve Bank lifts cash rate to 4.85 per cent, its fifth rise this year

The Reserve Bank of Australia raised the official cash rate by a quarter point to 4.85 per cent on Tuesday, its fifth increase this year. The rate is the highest since 2008, according to the central bank's figures. Governor Michele Bullock has said the rise will be felt by households as a squeeze on incomes. The Australian Financial Review reported that the move will deepen pressure on heavily mortgaged households and weigh on house prices and discretionary spending. The decision comes as the central bank seeks to contain inflation that rose sharply after the pandemic.

Afr

Reserve Bank of Australia Raises Cash Rate to 4.85 Per Cent in Fifth Hike This Year

The Reserve Bank of Australia raised the cash rate by 0.25 percentage points to 4.85 per cent, its fifth increase this year. The decision directly affects mortgage borrowers, who face higher repayments. Renter Laura Mayer said her rent had risen 32 per cent in a single increase this year and that she feared she could not cope with the latest rate rise. She blamed rising interest rates and said she was worried landlords would pass on the higher borrowing costs to tenants. The story reflects growing concern among households about the cumulative effect of the tightening cycle on housing costs.

ABC News & Headlines – Australian Broadcasting CorporationReserve Bank of AustraliaBloomberg.com

Reserve Bank Raises Cash Rate to 4.85 Per Cent on 3 November 2026

The Reserve Bank of Australia raised the official cash rate to 4.85 per cent on 3 November 2026. Australian lenders have begun announcing increases to their variable-rate home loans in response. Finder is tracking each lender's announcement in a running table. Borrowers on variable rates can expect their repayments to rise following the lender changes. The source does not detail the size of each individual lender's increase.

Finder

Reserve Bank Raises Cash Rate to 4.85 Per Cent in 6-3 Vote

The Reserve Bank of Australia raised the cash rate to 4.85 per cent on November 3, 2026, in a 6-3 majority vote. The Bank also downgraded its economic outlook in the same decision. Macquarie and Ubank have passed the increase on to customers, with Macquarie passing it to both borrowers and savers. Markets reacted with the Australian dollar falling and shares retreating from early gains. Ten-year bond yields hit two-month lows, while gold rebounded and oil prices fell below US$105 a barrel on hopes related to Iran.

Afr

Reserve Bank of Australia Raises Cash Rate to 4.85 Per Cent, Highest Since 2008

The Reserve Bank of Australia has raised the cash rate to 4.85 per cent, a level not seen since 2008. It is the fifth rate hike in 2026. The bank is responding to an inflation crisis that domestic and international factors have fuelled. Yahoo Finance Australia is running live coverage of the decision and the market reaction. Further rises or pauses will depend on upcoming inflation data.

Yahoo Finance AustraliaWikipedia: Reserve Bank of Australia

Sources

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