This article is general information only and does not constitute financial or tax advice. Consult a qualified tax professional for advice specific to your situation.
Key takeaways
- The RBA's September Monetary Policy Board minutes landed at 11:30 AEDT today, 13 October 2026. The vote was unanimous 9-0 to lift the cash rate target by 25 basis points to 4.60%, the fourth hike of 2026 and the highest since 2011 (Reuters via Yahoo Finance).
- Three upside inflation risks flagged in the August Statement on Monetary Policy have all materialised: the Middle East conflict lifting oil prices, global cost pressure from the AI and data-centre build-out, and tighter-than-assumed domestic capacity (Bloomberg). The hold case was 'briefly considered' and did not carry the day (ActionForex read-out).
- The minutes used the phrase 'existing policy might not be sufficiently restrictive' and said the board would increase the cash rate again if needed (InvestingLive summary). Markets reacted by pricing roughly another 15 basis points by year-end and 30 basis points by the first half of 2027.
- CBA's Gareth Allen says the clear risk is another hike and November is 'very much live' (CommBank Newsroom). ANZ and Westpac tip 4.85% on 3 November, CBA and NAB still see 4.60% as the peak (Canstar Big 4 wrap). The ANU shadow board puts a 3 November hike at a 62% probability (ANU RBA shadow board).
- A Melbourne Cup Day repeat costs a $750k interest-only investor loan about $156 a month before tax, and a $1 million loan about $208 a month. On top of the 9 October pass-through, which already added $125 to $130 a month to a $750k variable P&I loan, that is a cumulative $280 to $290 a month on the same loan if the November move lands.
- Big 4 lowest advertised owner-occupier variable rates after the 9 October pass-through sit at CBA 6.34%, Westpac 6.34%, NAB 6.44%, ANZ 6.50% (Canstar Big 4 wrap). Investor rates typically sit 20-30bp above these.
- Landlords have 15 working days to refix, draw cash reserves, or rework the budget. The next decision carries a fresh Statement on Monetary Policy with new staff forecasts for inflation, unemployment and growth.
The minutes landed at 11:30 this morning. The vote was 9-0#
The Reserve Bank of Australia released the minutes of the 28-29 September 2026 Monetary Policy Board meeting at 11:30 AEDT today. The decision was already on the record: a 25-basis-point lift in the cash rate target to 4.60%, the fourth hike of the year and the highest policy rate since 2011 (CommBank Newsroom summary).
What was new today was the colour. All nine members of the new Monetary Policy Board backed the hike. The earlier splits of 2026, the 5-4 in March and the narrow majority in May, did not reappear (Reuters via Yahoo Finance).
The minutes also confirm the board considered holding, but only briefly. The three points raised in the hold case were weakening housing market conditions, lingering uncertainty from the Middle East conflict, and the risk that earlier tightening would still be flowing through to activity. Each was raised and set aside. No member put forward a formal hold proposal (ActionForex read-out).
All three August upside risks have materialised#
The reasoning in favour of hiking was the heart of the minutes. The board said members cited three grounds (InvestingLive summary):
- Upside inflation risks had materialised. The three risks flagged in the August Statement on Monetary Policy, the Middle East conflict pushing oil higher, global cost pressure from the AI and data-centre build, and tighter-than-assumed domestic capacity, were all either confirmed or intensifying (Bloomberg).
- Acting promptly could prevent more persistent price pressures. The board judged that moving in September, rather than waiting for the next quarterly CPI print on 29 October, would reduce the risk of inflation expectations drifting higher.
- Existing policy might not be sufficiently restrictive. This is the key sentence. If the board sees the cash rate at 4.35% as not sufficiently restrictive, the implied logic is that 4.60% may also be short of the mark.
That third point is what moved markets today. OIS pricing shifted toward roughly another 15 basis points by year-end and about 30 basis points by the first half of 2027, consistent with the board's own language (Reuters via Yahoo Finance).
The housing section was clinical#
The minutes record that house prices had fallen by more than the RBA expected and that new housing loan commitments had dropped sharply, led by lending to investors (Switzer summary of the minutes). That matches Cotality's September Home Value Index: dwelling values down 1.1% in September and 5.2% below the March peak, with Sydney and Melbourne doing the heavy lifting.
Even so, the board set the housing weakness aside. The minutes say very few borrowers are in negative equity and staff analysis suggests that would still be true after a further 20% fall. In that scenario, only about 5% of mortgages would move into negative equity. The October Financial Stability Review, published two weeks before the meeting, carried the same number (ABC News on the FSR).
The practical reading: the RBA has banked a housing downturn into its stress tests and is not going to pull the handbrake on inflation to protect leveraged investors.
November 3 is 'very much live'#
CBA's head of Australian economics Gareth Allen reacted this morning to the minutes. CBA's house view remains that 4.60% is the peak, but Allen said the clear risk was another hike and that November was 'very much live' (CommBank Newsroom).
The split between the Big 4 is clean:
- ANZ and Westpac tip a 25bp lift to 4.85% on 3 November.
- CBA and NAB still see 4.60% as the peak but have both flagged November as live (Canstar Big 4 wrap).
The ANU RBA shadow board priced a 62% probability of a 3 November hike in its October read, published a week ahead of the minutes. The shadow board sits between the Big 4 and OIS markets on the hawkish/dovish spectrum (ANU shadow board).
The real test is the Q3 2026 CPI print on 29 October. The RBA board next meets on 3 November, with a fresh Statement on Monetary Policy and updated staff forecasts. A trimmed mean above 3.4% almost certainly delivers a hike. A print in the low 3s keeps the hold case alive, but only just.
What the September hike has already done to a landlord's cash flow#
The 9 October pass-through from the Big 4 is now flowing through to variable borrowers. Big 4 lowest advertised owner-occupier variable rates after the pass-through (Canstar Big 4 wrap):
- CBA: 6.34%
- Westpac: 6.34%
- NAB: 6.44%
- ANZ: 6.50%
Investor rates typically run 20 to 30 basis points above these. A standard investor variable rate at Big 4 therefore sits in the 6.55% to 6.80% band depending on LVR and whether the loan is interest-only.
Translated to monthly cash flow on a $750,000 investor loan at 6.65% variable:
- Interest-only: monthly interest around $4,156. Pre-September hike at 6.40% it was around $4,000. The September hike added about $156 a month, or $1,875 a year before tax.
- Principal and interest, 30 years: monthly repayment moves from about $4,690 to about $4,816. That is about $126 a month, or $1,512 a year.
On a $1 million investor loan, the September hike added about $208 a month interest-only, or $168 a month on P&I.
A 3 November repeat stacks another lift of the same size. On a $750k interest-only investor loan, a landlord writing a $4,000 interest cheque in late August is writing roughly $4,310 by mid-November if Melbourne Cup Day lands. That is a $3,720 a year before-tax lift from a single quarter's RBA action.
Negative gearing softens the hit, for now. Established dwellings bought on or after 12 May 2026 lose that softening from 1 July 2027 under the budget's negative-gearing restriction. Investors in the budget window wear the full rate impact into FY27-28 without the deduction cushion.
What to do with 15 working days#
The next RBA decision is 20 calendar days away. Options for a leveraged landlord:
- Refix the deal. Fixed rates already price in the Melbourne Cup Day scenario. Nine lenders lifted fixed rates in September, including some NAB investor terms above 7%. A split fix on part of the loan removes some of the volatility if a full refix is unattractive.
- Check the cash flow runway. If the next hike lands, is there a surplus between rent and the new repayment? For most leveraged landlords the honest answer is no. Three months of surplus cash in a buffer account is the difference between meeting a direct debit and scrambling.
- Review the rent calendar. Most state rules allow at least 12 months between increases, some capping at CPI or median. Decide whether a review is due and time it to the lease anniversary.
- Stress-test for 4.85% and 5.10%. A $750k investor interest-only loan at 7.05% costs about $4,406 a month, two 25bp hikes from here. If Melbourne Cup Day lands and the February 2027 meeting repeats, that is the number to budget around.
The 29 October Q3 CPI print will tell landlords whether the November 3 scenario is real or a tail. The RBA has told landlords today, in writing, that the burden of proof now sits with the data: unless CPI prints clearly below trimmed-mean expectations, the board sees existing policy as potentially not sufficiently restrictive.
Keep the numbers tight before 3 November#
Propkt is the one-stop shop for Australian landlords. Our mortgage calculator runs the exact figure for your investor loan at today's rate and at the Melbourne Cup Day scenario. Expense tracking carries through to tax time so the deductibility work is already done when the FY27 return is due.
In a quarter where the RBA has lifted 100 basis points and left the door open to more, the landlords who stay solvent run the numbers monthly. Set your plan this week.