The Reserve Bank has published the minutes of its 28–29 September meeting, when it lifted the cash rate to 4.60%. They give the clearest picture yet of why the Board moved, and they leave little doubt about its mindset: it will keep doing what it considers necessary to bring inflation down, “including increasing the cash rate target further if required”. That doesn’t make a rise on 3 November certain, but it’s a possibility worth planning for. Here’s what the minutes say, what they don’t, and how to get your home loan ready.
The short version
- The September decision to raise the cash rate by 0.25 points to 4.60% was unanimous.
- The Board’s main reason: several of the upside risks to inflation it flagged in August “had since materialised or were building”.
- Most borrowers are coping: fewer than 2% of owner-occupiers face a cash-flow shortfall, although scheduled mortgage payments are around 10% of household disposable income, close to their 2024 peak.
- On another 0.25% rise, repayments on a $600,000 loan at Canstar’s 6.75% average variable rate would go up by about $100 a month (Loanworth calculation, example only).
What the minutes are, and why they matter
Two weeks after each meeting, the RBA publishes minutes setting out what the Monetary Policy Board discussed and how it reached its decision. The September minutes came out on Tuesday 13 October at 11:00am Adelaide time. They’re the best guide to how the Board will read the data before its next decision, on Tuesday 3 November at 2:00pm Adelaide time.
Why the Board raised rates in September
The minutes say plainly that “the strongest argument for raising the cash rate target at this meeting was that several of the upside risks identified in August had since materialised or were building.” In August the Board had named three, and the minutes show each had since moved in the wrong direction.
1. Higher oil and fuel prices
The Middle East conflict had broadened, and global energy prices were “significantly higher” than the RBA assumed in August. Domestic petrol and diesel prices were 13% higher than forecast in August.
2. Global cost pressures from the AI boom
AI demand has pushed up component prices overseas, and Australian businesses reported sharp rises in software and IT costs.
3. Less spare capacity at home than assumed
This is the one the Board seemed most concerned about. July’s inflation figures were stronger than expected, especially for market services, and RBA staff now expect higher underlying inflation in the September quarter than they forecast in August. Staff judged the surprise more likely to reflect pressure in the domestic economy than fuel costs flowing through, and members “expressed their concern that excess demand was greater than previously assessed.” Put simply, the economy is still running a little too hot.
What the minutes say about more rate rises
The sentence borrowers will focus on comes at the end of the Board’s discussion. It said it would “remain focused on its mandate to deliver price stability and full employment and will continue to do what it considered necessary to achieve that outcome, including increasing the cash rate target further if required.”
Just as telling is what the Board said it was prepared to accept. Because global cost pressures have made its job harder, members acknowledged that getting inflation back to target “would require accepting slower growth in demand and employment than would otherwise be the case.” The Board says its strategy is still to preserve as many of the gains in employment as possible. But it’s now openly signalling that some slowing in the economy and the jobs market is a price it’s willing to pay.
What the minutes don’t do is commit to a November rise. The Board said it would “remain attentive to incoming data and the evolving assessment of the outlook and risks”, so the next move depends on the data. The Australian Financial Review’s reading on 13 October was that further price rises, and matching rate rises, “could be on the horizon”. Possible, in other words, but not locked in.
The minutes also record that, at the time of the meeting, market pricing implied “an additional increase of around 15 basis points by the end of the year and another 30 basis points in the first half of 2027”. That was market pricing in late September, not an RBA forecast, and it has moved since.
What the minutes say about households and housing
The Board also did its six-monthly financial stability review, and much of it is reassuring for households:
- Fewer than 2% of owner-occupier borrowers are estimated to face a cash-flow shortfall, well below the 2023–2024 peak. It’s expected to stay low even if rates and unemployment rise somewhat further.
- The median borrower holds savings equal to just under one year of scheduled repayments in the lowest income group, and almost two years in the highest.
- Very few borrowers are in negative equity, and staff analysis suggests that would likely remain the case even if home prices fell by 20%.
- Housing loan arrears are low, and unemployment was 4.6% in August.
Averages can hide real strain, though. Scheduled mortgage payments have risen to around 10% of household disposable income, around their 2024 peak, some borrowers are cutting back on discretionary spending, and extra payments into offset and redraw accounts are a little below average.
On the housing market, the Board noted that prices “had declined by more than expected” and that new housing loan commitments “had fallen sharply, led by lending to investors”. Staff now expect the total fall in prices to be greater than assumed in August, reflecting tighter policy as well as recent tax changes and some reversal of earlier strong gains. For more on how households are holding up, see our article on the RBA’s October Financial Stability Review.
Where the November decision stands
We covered the November outlook in detail in Is another rate rise in November already locked in? on 12 October. The minutes haven’t settled the debate:
- The big four are still split two-for-two. ANZ and Westpac expect a 0.25% rise to 4.85%, while CBA and NAB expect a hold but flag a rise as a risk (Aussie, 6 October). After the minutes, CBA economists said they still expect a hold but conceded there is a “substantial risk” they could be wrong (as reported by Newsquawk on 13 October).
- Markets still lean towards a hold. As of 13 October, ASX 30-day cash rate futures implied roughly a one-in-four chance of a rise on 3 November, with an expected cash rate of about 4.66% for November (Central Bank Watch, using the ASX Rate Tracker method). These odds change every trading day.
Three things matter most before 3 November: the September jobs figures (Thursday 15 October, 11:00am Adelaide time), September-quarter inflation (Wednesday 28 October, 11:00am Adelaide time), and oil prices and the Middle East. Inflation is the big one. RBA staff already expect underlying inflation for the quarter to beat their August forecast, so the question is by how much.
What home loan rates look like right now
Canstar’s weekly wrap, reported by Australian Broker on 13 October, shows 40 lenders, including all of the big four and their subsidiary brands, have passed on the September rise. Canstar’s average owner-occupier principal-and-interest variable rate is now 6.75%.
Fixed rates are moving too. Last week 21 lenders lifted 510 fixed rates by an average of 0.21 points, leaving none starting with a “5”. Canstar’s Sally Tindall called the volume of fixed-rate increases “a troubling sign considering banks tend to move fixed rates ahead of an RBA hike, not following.”
What another 0.25% would cost
If rates rose again and your lender passed it on in full, here’s roughly what it would add, using Canstar’s 6.75% average variable rate over 30 years, principal and interest. $743,000 is Equifax’s average first home buyer loan, from yesterday’s first home buyers article.
| Loan amount | At 6.75% | At 7.00% | Extra each month |
|---|---|---|---|
| $600,000 | about $3,892 | about $3,992 | about $100 |
| $743,000 | about $4,819 | about $4,943 | about $124 |
Loanworth calculation, rounded, example only. Actual repayments vary by lender and loan. It’s an illustration, not a forecast.
What you can do now
Budget for one more rise, just in case
Work out what another 0.25% would add and whether you could manage it. If you can, consider paying that extra now. If rates don’t rise, you’ve built a buffer in your offset or redraw. If they do, it won’t come as a shock.
Check your rate against the market
Lower rates than Canstar’s 6.75% average are on offer. If your loan is straightforward, asking your lender for a better rate or looking at a refinance may help, though not everyone can switch.
Don’t rush into fixing
Fixed rates are now all above 6% and still rising. Fixing brings certainty but limits flexibility, so compare carefully before you lock in.
If things are tight, act early
Most borrowers are coping, but if you’re finding repayments hard, talk to your lender or a broker before you miss a payment. Hardship options exist and are easier to arrange early.
Related reading
- Is another rate rise in November already locked in? (12 October)
- Most mortgage holders are still coping: the RBA’s October Financial Stability Review (7 October)
- Fixed rates are rising faster than the cash rate (6 October)
- Advertised rate or comparison rate? (10 October)
Want to know how another rise would affect your loan?
Book a no-obligation chat and we’ll run the numbers with you, including what another 0.25% would mean for your repayments and whether your current rate still stacks up. 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: Reserve Bank of Australia, “Minutes of the Monetary Policy Board Meeting, 28 and 29 September 2026”, released 13 October 2026 (11.30am AEDT). Reserve Bank of Australia, cash rate target and upcoming releases (next decision 2.30pm AEDT, 3 November 2026). Australian Financial Review, Grace Lagan, “Weaker growth must be accepted to defeat inflation: RBA”, 13 October 2026. Aussie, “What experts predict for the RBA’s November 2026 interest rate decision”, 6 October 2026. Newsquawk headline on CBA’s November view, 13 October 2026. Central Bank Watch, RBA rate probabilities based on ASX 30-day interbank cash rate futures, data as of 13 October 2026. Australian Broker, Mina Martin, “Lenders pass on RBA hike as fixed rates clear 6%”, 13 October 2026 (Canstar weekly rate wrap). Equifax average first home buyer loan, as reported by realestate.com.au, 13 October 2026. Australian Bureau of Statistics, release calendar (Labour Force, 15 October 2026; Consumer Price Index, September quarter, 28 October 2026). Repayment example: Loanworth calculation, rounded, example only. Bank and market views are their own and can change.
General information only, not credit advice. It doesn’t take your objectives, financial situation or needs into account.
Loanworth Pty Ltd (Credit Representative Number 547934) is a Credit Representative of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).