The RBA lifted the cash rate to 4.85%. What it means for first home buyers
The second rise in a row. Here's what could change for your repayments, your borrowing limit and your build.
What happened
On 3 November 2026, the Reserve Bank of Australia raised the cash rate target by 0.25 percentage points to 4.85%. It followed another 0.25 point rise on 30 September. The board's vote was split, with six members in favour and three preferring to hold at 4.60%.
Why the RBA moved
- Inflation is high: headline inflation was 3.9% over the year to the September quarter, and trimmed mean inflation was 3.7%.
- It's taking longer to come down: the RBA expects inflation to stay above 3% until the end of 2027, and to reach about 2.5% by mid-2028.
- The risks lean higher: the RBA pointed to fuel costs and the conflict in the Middle East, and it's concerned that expectations of higher inflation could become entrenched.
What it could mean for your repayments
The RBA doesn't set your home loan rate. Lenders do, but they often move in response. Here's the effect of two 0.25 point rises on a $600,000, 30-year principal and interest loan, using an example rate:
| Example rate | Monthly repayment |
|---|---|
| 7.00% | $3,992 |
| 7.25% | $4,093 |
| 7.50% | $4,195 |
Example only, not a quote or a current market rate. Your rate depends on your lender and loan.
What first home buyers can do now
- Recheck your borrowing limit. Lenders test whether you could afford a higher rate, so a rise can reduce how much they'll lend. Start with our borrowing calculator.
- Ask about your pre-approval. If you have one, ask your lender or broker whether it still stands at the same amount.
- Budget for a buffer. Work out whether you could still manage your repayments if rates rose further.
- Include the build period. If you're building, plan for your rent and loan interest at the same time.
Is the market changing?
The RBA says housing conditions have eased, with prices in September almost 5% below their March peak. That's a national picture, so it may not match your suburb. Nobody can say for certain where rates or prices will go next, so base your decision on what you can afford. Loan advice comes from your bank or mortgage broker, and we can connect you with one.
Sources: RBA decision, 3 November 2026 · RBA Statement on Monetary Policy, November 2026 · RBA cash rate table. Rules and rates change, so confirm before you sign.
General information only, not financial, credit, tax or legal advice. Last checked 4 November 2026. Back to all articles.