RBA cash rate rises to 4.85%

The RBA cash rate is 4.85%. The Reserve Bank's Monetary Policy Board raised it by 0.25 percentage points on 3 November 2026, effective 4 November, according to the RBA's decision statement. It was the fifth rise of 2026, taking the cash rate from 3.60% at the start of the year to its highest level since 2008.

The RBA cash rate in 2026: five rises in ten months

The RBA cut the cash rate three times in 2025, to 3.60% in August, then held it there for the rest of that year. It started raising again in February 2026, according to the RBA's cash rate history:

The Board held the rate at 4.35% in June and August 2026 before rising again in September and November.

Why the RBA keeps raising interest rates

Inflation picked up again. When it started raising in February, the Board said inflation "picked up materially in the second half of 2025" and judged that "inflation is likely to remain above target for some time" (RBA, 3 February 2026).

By November its explanation was that "the data have confirmed that underlying inflation remains broadly based" (RBA, 3 November 2026). Consumer prices rose 4.3% in the 12 months to September 2026, and trimmed mean inflation, the measure the RBA watches most closely, was 3.6%, according to the ABS. In Melbourne, prices rose 4.0% over the same 12 months, the ABS found. The RBA's target is 2 to 3%.

What it adds to a mortgage

The average variable rate on owner-occupier home loans was 6.2% in September 2026, up from 5.5% in December 2025, according to the RBA's table F6. That September figure doesn't yet include the November rise.

Our calculation, for a 30-year principal-and-interest loan, if the November rise is passed on in full (6.45%):

Each 0.25-point rise adds about $131 a month to an $800,000 loan at these rates (our calculation). Your own rate, loan balance and term will differ: your lender's figures are the ones that count.

What it means for house prices in Melbourne's east

In November the Board said "housing prices have fallen significantly" and pointed to "uncertainties about the extent and economic effects of the downturn in the housing market" (RBA, 3 November 2026).

The Victorian Government's latest suburb figures cover the March quarter 2026, before the May, September and November rises. Even then the east was split, according to the Victorian Property Sales Report: in the year to the March quarter, the median house price fell 27.6% in Hawthorn, 26.2% in Canterbury and 24.1% in Kew, while it rose 37.1% in Macleod, from 19 sales. Across Boroondara, 9 of the 10 suburbs with at least 10 sales recorded a fall (our calculation). We break the quarter down council by council in Melbourne's east house prices.

Higher rates cut how much buyers can borrow, and prestige suburbs, where loans are biggest, have so far moved most. Medians in any one quarter can swing with the mix of homes sold, so a suburb's ten-year history is a better guide than one quarter: every suburb page has one, for example Doncaster or Glen Waverley.

If you're thinking of selling

Rate rises change what buyers can pay, but your home's price depends on your street, your block and how it compares with what's for sale now. A free appraisal from a local agent gives you a price range for your home today, and you don't have to sell.