Rate Watch
Two dates now sit at the centre of the mortgage market. On Wednesday 28 October the Australian Bureau of Statistics releases September quarter inflation. Six days later, on Melbourne Cup Day, Tuesday 3 November, the Reserve Bank board decides whether to lift the cash rate for a fifth time this year. The current target is 4.60 per cent, the highest in about 15 years.
Economists are genuinely divided, and that matters for households across Camden, Campbelltown, Oran Park and Leppington who hold variable rate loans. Here is what is known, what is not, and how to prepare either way.
The big four banks are no longer singing from the same sheet. ANZ has carried a November increase in its forecast since late August. Commonwealth Bank and NAB both hold a pause as their base case, although neither rules out a hike. CBA economists have described the call as finely balanced, hinging on September quarter CPI, the labour market, household spending and the conflict in the Middle East.
The tone from the central bank itself has leaned firm. RBA Deputy Governor Andrew Hauser said in recent remarks that the inflation outlook is worse than the bank forecast, a signal markets read as keeping a November increase firmly in play.
The number to watch on 28 October is trimmed mean inflation, the measure the RBA weighs most heavily. It has held at 3.6 per cent for three consecutive months on the monthly series. A quarterly reading above that strengthens the case for a hike on 3 November. A softer print supports a pause.
If the full 0.25 per cent were passed on, a variable rate of 6.34 per cent would move to 6.59 per cent. The table below uses a 30-year principal and interest loan, consistent with the figures in our September rate decision analysis.
| Loan balance | Monthly at 6.34% | Monthly at 6.59% | Monthly increase | Annual increase |
|---|---|---|---|---|
| $500,000 | $3,108 | $3,190 | +$82 | +$985 |
| $650,000 | $4,040 | $4,147 | +$107 | +$1,280 |
| $800,000 | $4,973 | $5,104 | +$131 | +$1,576 |
| $1,000,000 | $6,216 | $6,380 | +$164 | +$1,970 |
Figures are illustrative, rounded to the nearest dollar and assume a lender passes on the whole increase. Your own rate and remaining term will change the result.
Auction data suggests buyers are already stretched. Cotality's preliminary figures for the week to 18 October put the Sydney clearance rate at 54.6 per cent, the highest of the capitals by volume, with Melbourne at 56.2 per cent. Domain's count for the same week was lower at 51 per cent, up from 46 per cent a week earlier. Preliminary numbers are routinely revised, but all of them sit well below the levels that signal a seller-friendly market.
Home values tell the same story. Cotality's most recent monthly index has Sydney roughly 8.6 per cent below its February peak and about 7 per cent lower over the year, with the city's declines running faster than during the 2022-23 correction. NAB's September Housing Monitor recorded national dwelling prices falling 0.9 per cent in August, the fifth consecutive monthly decline.
Falling prices do not automatically make purchasing easier. Each rate rise cuts borrowing capacity because lenders assess new loans at a buffer above the actual rate. Cotality estimated that the four increases earlier this year have already taken about $90,000 from average borrowing capacity. For buyers eyeing established homes in Camden, Narellan and Harrington Park, or new builds in Oran Park, Gregory Hills and Leppington, that can be the difference between a house and a townhouse.
The upside is negotiating room. Vendors facing slow-moving stock and soft clearance rates are increasingly willing to deal, and a buyer with a current pre-approval and a clear ceiling is in a stronger position than at any point in the past three years.
Work out whether your household can comfortably absorb the 6.59 per cent scenario in the table above, and what a further rise beyond that would do. Knowing your threshold beforehand turns a reactive decision into a planned one.
Lenders do not move in lockstep, and many borrowers sit on a rate well above what new customers are offered. A quick comparison across our panel of lenders often finds a meaningful gap, particularly for loans under 80 per cent of the property's value.
If your approval pre-dates the September increase, serviceability may have shifted. Reconfirming now avoids surprises at contract stage.
Compare fixed, variable and interest-only combinations side by side before the RBA meets.
A hawkish CPI print would make a fifth increase the likely outcome. A benign one would probably tip the board towards a pause, but with inflation above the 2 to 3 per cent target band, even a pause would not signal cuts. Planning for rates to stay at or near current levels is the prudent assumption for variable borrowers.
A further 0.25 per cent increase adds roughly $41 per month for every $200,000 borrowed, assuming the full rise is passed on. On a $650,000 loan that is about $107 a month, and on $800,000 it is about $131 a month, or $1,576 a year. The table in this article shows the figures for four common loan sizes.
Fixed rates already price in the market's expectation of further increases, so fixing after a hawkish signal rarely delivers a bargain. The better question is how much repayment certainty your household needs. Many borrowers choose to fix a portion of the loan and leave the remainder variable and offset-linked. A broker can model the split against your cash flow before you commit.
Soft clearance rates and rising stock mean more negotiating room for buyers who are pre-approved and clear on their limit. The constraint is borrowing capacity, not competition. Lenders assess you at a buffer above the actual rate, so each rate rise lowers the amount you can borrow. Confirm your approval is current, and have it reassessed if it was issued before the September increase.
Disclaimer: This article is general information only and does not constitute financial, mortgage, or credit advice. Market data is drawn from Cotality, Domain, NAB, the RBA and media reports as at 21 October 2026, is preliminary in places and may be revised. Forecasts are not guaranteed. Before changing your loan, speak with a qualified mortgage broker or financial adviser. Mankin Finance Pty Ltd holds Australian Credit Licence 389087.
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