Tuesday's Melbourne Cup Day rate decision is now close to fully priced in. Markets and all four big banks expect the Reserve Bank to lift the cash rate from 4.60% to 4.85%. What economists and traders are really arguing about is whether that will be the last rise. Futures markets now put roughly even odds on a second increase by the middle of next year, and the major banks don't agree on what happens after November. Here's where things stand, what will decide it, and what's worth sorting out before Tuesday afternoon.
The short version
- The cash rate is 4.60%. The RBA announces its decision on Tuesday 3 November at 2:00pm Adelaide time (2:30pm AEDT).
- Markets put the odds of a 0.25% rise at roughly 80% or more. A rise would take the cash rate to 4.85%, the highest since 2008 and the fifth rise this year.
- Futures pricing on 28 October implied about a 48% chance of a second rise to 5.10% by around May 2027, up from about 14% before the September inflation figures.
- The banks are split. CBA and NAB expect a pause after November. Westpac says the risk of another rise, most likely in February, has increased.
- For borrowers, the practical step is the same either way: plan for Tuesday as the base case, and check you'd still be comfortable if rates went a little higher in 2027.
Where things stand for Tuesday
The Reserve Bank's Monetary Policy Board meets on Monday and Tuesday, and announces its decision at 2:00pm Adelaide time on Tuesday 3 November. It's also a forecast meeting, so the decision comes with a new Statement on Monetary Policy, including updated forecasts for inflation, unemployment and growth.
Expectations shifted sharply after last Wednesday's inflation figures. Headline inflation rose to 4.3% over the year to September, and the trimmed mean, the RBA's preferred measure of underlying inflation, rose 1.0% in the quarter, above the RBA's own 0.8% forecast. All four major banks now expect a 0.25 percentage point rise to 4.85%.
Market pricing tells a similar story, although the exact numbers depend on the day and the measure:
- The ASX RBA Rate Tracker put the chance of a rise at 80% at the close on 29 October, up from 60% on 27 October, the day before the inflation figures.
- The ASX 30-day cash rate futures November contract implied about 84% at the close on 28 October, up from about 60% before the inflation release.
So a rise is the expected outcome, but it isn't certain. The Board still decides on the day. If it goes ahead, 4.85% would be the highest cash rate since 2008, and the fifth increase of 2026 after rises in February, March, May and September.
We covered what a 0.25% rise would cost in our 29 October article. As a guide, Canstar estimated it would add about $92 a month to a $600,000 variable loan with 25 years remaining.
Is 4.85% the peak?
This is where opinions start to split. Before the September inflation figures, futures markets saw a second rise as a long shot. Now they see it as close to a coin flip.
According to Market Index's analysis of ASX futures at the 28 October close, the implied cash rate curve peaks at about 4.97% in May 2027. That works out to roughly a 48% chance of a second rise to 5.10%, up from just 14% before the inflation release. The ASX Rate Tracker on 29 October showed a similar picture, with implied yields of 4.83% for December 2026 and 4.90% for February 2027, a level that puts some chance on a further rise.
Markets also aren't pricing quick relief. The March 2028 futures contract was still sitting at about 4.79% on 28 October, above today's 4.60%.
The forecasters themselves fall into two broad camps:
| Pause after November | Risk of more rises |
|---|---|
| CBA: expects a rise to 4.85%, then holds in December and February, with cuts "pencilled in" for August and November 2027 if enough progress is made on inflation. It cautions that "a large degree of uncertainty remains on timing". | Westpac: says "the risks of another hike – most likely in February – have increased", and that "some members might dissent" on Tuesday. |
| NAB: "the RBA will likely pause post November but will nonetheless remain a long way from declaring victory on inflation". | UBS: judges two more rises, to 5.10%, more likely than none. If a second rise comes, it favours February 2027 over December. |
| Morgan Stanley: expects the November rise, possibly with some dissenting votes, then a hold as demand softens. | Futures market: about a 48% chance of 5.10% by around May 2027 (28 October close). |
CBA's Head of Australian Economics, Belinda Allen, summed up the debate in a note on 28 October: "The key question is whether four hikes this year is enough." CBA describes a November move as "an insurance hike", designed to stop inflation running higher for longer.
What will decide it
No single number will settle the question, but a handful of things are worth watching:
- The vote on Tuesday. If several Board members vote against a rise, it would suggest the bar for a second increase is higher than futures imply. A unanimous decision would point the other way.
- The RBA's new forecasts. If the updated Statement on Monetary Policy shows underlying inflation returning to the 2–3% target band by late 2027 at a cash rate near 4.85%, that supports a peak. If inflation is still forecast above 3%, February becomes a live meeting.
- The October monthly inflation figures, expected in late November, and September-quarter economic growth figures.
- Fuel prices. Petrol has been a big driver of the recent jump in inflation, and Market Index describes fuel as the swing factor. If supply pressures ease, inflation could cool faster than markets currently expect.
Meanwhile, the property market
Buyers are already reacting to higher rates. Domain's preliminary auction results for the week to Saturday 31 October, which included the Cup weekend, showed clearance rates of 48% in Sydney, 56% in Melbourne (63% at the same time last year) and 41% in Canberra. Brisbane cleared just 19%, down from 60% a year earlier, and Adelaide 32%, compared with 70% a year ago. These are preliminary figures, and Domain counts withdrawn auctions as unsold.
Prices were already easing before this week. Cotality's Home Value Index fell 1.1% nationally in September, the sixth monthly fall in a row, leaving values 5.2% below their March peak. Cotality's October figures are due early this week.
What it means for you
- Plan for Tuesday as the base case. If you're on a variable rate, assume your repayments will rise once your lender passes on the change. After the September rise, the major banks passed it on from 9 October, so check your lender's notice for the exact date.
- Test your budget for more. A sensible planning check, not a forecast: could you still manage if your rate went up another 0.25% to 0.5% in 2027? If the answer is no, it's better to know now and build a buffer while you can.
- Check your rate before Tuesday. Compare what you're paying with what lenders offer new customers, and ask your lender for a better rate. Use the comparison rate, not just the headline rate. Refinancing still works for many people, but each rise shrinks borrowing capacity, because lenders test your application at your rate plus a buffer.
- Thinking of fixing? Fixed rates already build in the rises markets expect, as we explained in our 6 October article. If a second rise is partly priced in, fixing may not be the bargain it looks. It's a trade-off between certainty and flexibility, not a sure win.
- Buying? Soft auction results in Brisbane and Adelaide can mean more room to negotiate. But if you have pre-approval, get it rechecked after Tuesday, as a higher rate usually reduces how much you can borrow.
- Feeling squeezed? Talk to your lender early. Hardship options exist, and lenders generally have more options if you contact them before you fall behind. Our 30 October article covers what to do.
If the RBA does something different on Tuesday, we'll cover the decision and what it means for borrowers on the day.
Key dates
- Early this week: Cotality Home Value Index for October.
- Tuesday 3 November 2026, 2:00pm Adelaide time (2:30pm AEDT): RBA cash rate decision and Statement on Monetary Policy.
- Late November (expected around 25 November): ABS monthly inflation figures for October.
- Tuesday 8 December 2026: the RBA's last decision for 2026.
Related reading
- Self-employed? Ubank will now look at one year's tax return, and another non-bank has joined the 5% Deposit Scheme (Saturday 31 October)
- Nearly 1 in 3 mortgage holders are now at risk of stress, and APRA says late repayments are ticking up (Friday 30 October)
- Inflation just hit 4.3%, and all four big banks now expect a rate rise on Melbourne Cup Day (Thursday 29 October)
- Adelaide auctions cleared just 28% this weekend, Brisbane 20% (Sunday 25 October)
- Advertised rate or comparison rate? (Saturday 10 October)
- Fixed rates are rising faster than the cash rate (Tuesday 6 October)
What would Tuesday, and possibly another rise, mean for you?
Book a no-obligation chat and we'll run the numbers on your repayments with you. We'll start with general information, and if you want personal recommendations we'll do a proper fact-find first. There's no cost and no pressure.
Sources: 1. Property Investment Professionals, "RBA November 2026 Rate Decision", published 31 October 2026 (market data to 29 October) — ASX RBA Rate Tracker 80% at 29 October close, 60% on 27 October; implied yields 4.83% December 2026 and 4.90% February 2027; 4.85% highest since 2008; NAB and Westpac quotes; CBA cut timing; RBA decision 2:30pm AEDT 3 November with Statement on Monetary Policy; last 2026 decision 8 December; October CPI expected ~25 November (https://propertyinvestmentprofessionals.com.au/blog/rba-november-2026-rate-decision-preview-property-investors). 2. Market Index, Carl Capolingua, "RBA set to inflict fifth interest rate hike on Cup Day, number six is now a 50-50 bet", 29 October 2026 — ASX 30-day cash rate futures November contract ~84% at 28 October close (~60% pre-CPI); curve peak ~4.97% May 2027, ~48% chance of 5.10% (from 14%); March 2028 ~4.79%; UBS and Morgan Stanley views; dissent, forecasts, October CPI, GDP and fuel as deciding factors (https://www.marketindex.com.au/news/rba-set-to-inflict-fifth-interest-rate-hike-on-cup-day-number-six-is-now-a-50-50-bet). 3. CommBank Newsroom, "CommBank economists forecast November RBA interest rate hike as inflation risks build", 28 October 2026 — rise to 4.85%, fifth rise of 2026, Belinda Allen quotes, holds in December and February, cuts pencilled in for August and November 2027 (https://www.commbank.com.au/articles/newsroom/2026/10/commbank-november-rba-rate-hike-inflation-risks.html). 4. Domain, auction results week 25–31 October 2026, preliminary, updated 31 October 2026 — Sydney 48%, Melbourne 56% (63% last year), Canberra 41%, Brisbane 19% (60% last year), Adelaide 32% (70% last year) (https://www.domain.com.au/auction-results/). 5. Cotality, "Australian housing values down for sixth straight month in September", 1 October 2026 — national −1.1% in September, 5.2% below March peak (https://www.cotality.com/au/insights/articles/australian-housing-values-down-for-sixth-straight-month-in-september). 6. Canstar estimate of +$92 a month on $600,000 (28 October 2026), as covered in our 29 October article.
General information only, not credit advice.
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