Australian interest rates Australian Property

Aussie mortgage holders burn like its 1989

Tuesday 3 November 2026

The Reserve Bank of Australia’s (RBA) preferred inflation measure, trimmed mean inflation, rose from 3.6% to 3.7% in the September quarter, exceeding the RBA’s forecast of 3.5%.

With trimmed mean inflation tracking well above the RBA’s target band of 2% to 3%, financial markets are pricing in an 80% probability that the official cash rate will be lifted to 4.85% on Tuesday, the highest level in 18 years.

If the RBA hikes on Tuesday, the variable owner-occupier mortgage rate on new home loans would rise to around 6.75%, up from a low of around 2.4% in late 2021, at the height of the COVID pandemic, when the official cash rate was slashed to only 0.1%.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.