Will the RBA deliver a fifth cash rate hike before Christmas?

All four major banks are now forecasting a November rate rise, raising the possibility of a fifth cash rate increase before Christmas.

Following the latest consumer price data from the ABS Consumer Price Index and Senate estimates testimony from RBA Governor Michele Bullock, Australia’s major banks updated their expectations. If you are a homeowner wondering how this impacts your budget, here is a breakdown of the facts, the numbers, and what you can do.

Yes. A fifth cash rate increase before Christmas looks more likely after all four major banks moved to forecast a November rise.

CommBank and NAB changed their forecasts following the inflation release and Governor Michele Bullock’s RBA Senate Estimates Opening Statement that domestic inflation pressures remained stronger than previously assessed. They now join ANZ and Westpac in expecting a 0.25 percentage point increase, which would take the cash rate from 4.60% to 4.85%.

• The latest ABS CPI figures show consumer prices rose 4.3% in the year to September 2026, compared with 4.0% in the year to August.
• This 0.3 percentage point increase in annual inflation strengthens the case for another cash rate rise.
• Trimmed mean inflation was 3.6% over the 12 months to September, keeping underlying inflation above the target range of 2–3%.

However, the inflation figures alone did not drive the banks’ changed forecasts; CommBank and NAB noted the results were broadly in line with their expectations, with revised calls also reflecting the RBA’s assessment that domestic demand was still stretching the economy’s capacity to supply goods and services.

• Elevated Inflation: The core concern is that inflation remains too high, and the economy may need to slow further to bring it sustainably back to target.
• Stronger Underlying Pressure: Higher fuel prices helped lift September's headline figure, but underlying inflation also remained elevated. The quarterly increase in trimmed mean inflation was above what the RBA had forecast in August.
• Widespread Price Growth: NAB's Economic Analysis shows price rises are spread across the economy rather than limited to petrol, with almost 60% of the CPI basket recording annualised price growth above 3.5% over the past three months.
• Capacity Constraints: In her opening statement to Senate estimates on 28 October 2026, Governor Bullock noted that inflation was likely to be higher than the RBA's August forecasts and that the labour market appeared a little tighter than previously judged. Weak productivity growth makes it harder for the economy to grow without adding to inflation.

While the Reserve Bank of Australia has not committed to another increase and will announce its next cash rate decision on 3 November 2026, economists believe that another hike is on the table.

All four major banks forecast a November increase:

Note: These forecasts assume a 0.25 percentage point increase and are indicators of economists' expectations, not an official RBA decision.

If the interest rate increases from 6.00% to 6.25%, a borrower with a $600,000 loan and 25 years remaining could pay around $92 more a month:

Calculations assume monthly principal and interest repayments over a remaining 25-year term, with the rate increase passed on in full. Figures are rounded independently, and fees/offsets are excluded.

• Work out what another increase would cost: Use your current balance, interest rate, and remaining term to estimate your repayments after a 0.25 percentage point increase. If your fixed term is ending soon, check your lender's revert rate.
• Ask your lender for a better rate: Request a rate review from your current lender if you find yourself overpaying. You can run a quick Mortgage Health Check on Bheja to find out how your rate compares to the broader market.
• Check your offset account: Check that your offset account is correctly linked and actively reducing the interest charged.
• Contact your lender early if struggling: Contact your lender early if repayments are difficult. If your budget already falls short, contact your lender’s hardship team. Explain your circumstances and what you can realistically afford. Depending on your situation, the lender may discuss temporarily reducing or pausing repayments, or changing the loan terms. Ask how any arrangement would affect interest and future repayments.