RBA Cash Rate Held At 3.60%

Why Did The RBA Hold The Cash Rate In November 2025?

At its November 2025 meeting, the Reserve Bank of Australia (RBA) kept the cash rate unchanged at 3.60%, taking a cautious stance as inflation rose more than expected and the economy continued to show signs of recovery.

1. Inflation Rose More Than Expected

After easing steadily since 2022, inflation picked up again in the September quarter. Trimmed mean inflation rose to 3.0%, up from 2.7% in June, while headline inflation increased to 3.2%, largely due to the end of electricity rebates in several states.

The RBA believes some of this rise was temporary, but expects inflation to remain slightly above target for a while before easing back to around 2.6% by 2027.

2. The Economy Is Recovering

Spending and housing activity are gaining pace, with rising home prices and higher construction costs indicating that earlier rate cuts are beginning to take effect. Credit remains readily available, supporting growth for households and businesses.

3. Labour Market Still Tight

Employment growth has slowed modestly, and the unemployment rate rose to 4.5% in September. However, labour demand remains firm, with many businesses still facing worker shortages. Wages growth has eased slightly but remains strong relative to weak productivity, keeping pressure on costs.

4. A Cautious Pause

With inflation proving sticky and domestic demand improving, the RBA chose to pause and assess the impact of earlier rate cuts. The Board noted that financial conditions have already eased this year, but it will take time to see their full effect.

The RBA said it remains focused on price stability and full employment, staying alert to both inflation risks and potential global or domestic slowdowns before making its next move.

Our Experts Take On The Board's Decision

Here is what our experts say about the cash rate decision and what it means for borrowers.

The RBA held at 3.60%, and honestly, I think it was the right move — but not the easy one. Inflation’s still above target and the recent CPI print spooked markets just enough to make a cut look premature. The RBA’s flying the plane through cloud cover here. They’re waiting for clearer signs that inflation is heading back into the 2-3% band and the labour market isn’t cracking. Borrowers hoping for relief will need to hang tight — we’re not there yet.

Otto Dargan, CEO of Home Loan Experts

The RBA held due to the high inflation figure and the lack of urgency around cutting rates further. There is little need for us to move to emergency levels of monetary policy; yes, mortgage holders are in pain, but we are not the main thing that the RBA focuses on.

It was pretty obvious that the RBA would hold their ammo until a further meeting when it is more urgently required.

Jonathan Preston, Senior Mortgage Broker

So what does it mean for homeowners?

Dargan says, “This decision keeps pressure on households, especially first-home buyers and refinancers on the edge of serviceability. But it also signals the RBA doesn’t want to repeat the mistakes of 2021 – easing too early, only to reverse course. They’ll wear a few bruises on consumer sentiment if it means anchoring inflation properly.”

How The RBA Cash Rate Affects Interest Rates

Lenders add a margin to the official cash rate to determine the variable interest rate they offer to customers.

When the RBA raises the cash rate, lenders often increase their variable interest rates. This means your mortgage repayments go up.

When the RBA cuts the cash rate, lenders may lower interest rates. So, your repayments could go down. However, note that not all lenders pass on the full change.

If the cash rate is unchanged, your repayments usually stay the same. However, lenders can still change rates for other reasons.

Use our rate change calculator to find out what your repayments should look like whenever the cash rate changes.

Upcoming RBA Monetary Policy Board Meeting Calendar 2025

Source: rba.gov.au