Australians were all smiles at Tuesday’s Melbourne Cup. But for mortgage holders, the mood was far less festive. As widely expected, the Reserve Bank of Australia (RBA) kept the official cash rate (OCR) steady at 3.6%.
The nation's central bank cited rising inflation as the key driver for its unanimous decision after September's quarterly consumer price index (CPI) showed that both headline inflation and trimmed mean inflation were on the uptick.
RBA Governor Michele Bullock made it clear after September’s rate hold that the board is taking a wait-and-see approach, preferring to assess incoming data before making any further moves on monetary easing.
When asked about the outlook for additional rate cuts this year, Bullock said Tuesday, “It is possible there are no more rate cuts, possible there are more. We are not wedded religiously to a particular path."
Here's what some market players had to say about the RBA's latest move.
Chief economist at Ray White Group
"The Reserve Bank of Australia has held the cash rate steady at 3.60%, opting for caution in the face of a surprisingly strong inflation surge and a labor market that is clearly losing momentum. Today’s hold reflects a central bank walking a narrow line: inflation has re-accelerated just as growth and employment are fading. The policy stance remains restrictive, and the RBA will want to avoid locking in inflation expectations while also ensuring it does not unnecessarily stall the economy.
"For households, today’s decision means no relief yet on mortgage repayments, and the persistence of price pressures will keep cost-of-living conditions challenging. House price growth, however, continues, driven by generous first-home buyer incentives, three rate cuts this year and a shortage of homes."
Head of Australian economics at ANZ
"Our view remains that a final 25 [basis point] easing in the first half of 2026 is the most likely path for monetary policy. That said, there is a risk that the final rate cut we expect in February could end up occurring later (possibly May, after the next two quarterly CPIs). Our expectation of one more rate cut reflects some recent signs of softening in leading indicators of activity and a view that the Q3 inflation result was likely to have been a one-off."
Head of Australian Economics at Commonwealth Bank (CBA)
"We expect the cash rate to remain on hold in the foreseeable future. Upcoming data on inflation is key in determining where the risks lie to this base case.”
"Mortgage brokers can still help borrowers to strengthen their financial position despite the Reserve Bank of Australia’s decision to leave the official cash rate on hold. While mortgage holders will be disappointed, we encourage those who want a better rate on their loan, or are considering refinancing, to contact their broker."
"There is a lot of talk at the moment about whether borrowers should choose fixed or variable rates. I’d expect that brokers would be receiving similar enquiries. Brokers understand that there’s no right or wrong answer as each person’s circumstances are different. The advantage we have is the ability and, of course, the obligation to act in the best interests of each customer."
Chief executive officer at Mortgage Choice
"Our brokers are seeing competition in the property market ramping up. On one side, you have a new group of first-home buyers motivated to get their foot on the property ladder thanks to the expanded Home Guarantee Scheme. And on the other side you’ve got investors, with both groups often going after the same properties."
Senior economist at REA Group
"The result was a material surprise; meaning, the RBA will need clear evidence that inflation pressures are easing before cutting rates again. The [central] bank remains cautious and data-driven, but mindful that policy is already restrictive and the labor market is gradually cooling.
"Increased borrowing power, lower mortgage rates and improving sentiment are fuelling renewed competition. Keeping rates steady won’t derail that recovery. Earlier cuts and stronger confidence continue to support buyer demand, aided by population growth and the expansion of the Home Guarantee Scheme. With new supply constrained, these factors will keep upward pressure on prices, though affordability challenges mean the pace of gains is likely to remain slower than previous cutting cycles and vary across cities.”
Data insights director at Canstar
“Today’s statement reflects the challenge now facing our central bank: its dual mandate to keep prices in check and Australians in jobs [that] is becoming increasingly difficult to achieve. With a dark cloud now hanging over the possibility of further cuts, the question for some borrowers will be whether it’s now time to switch back to fix [rates]."
Economic director at Compare the Market
“I don’t think we’ll see a rate cut for at least six months. I think the RBA will want to see CPI data from February before they make another move on rates because they really need to be convinced that inflation isn’t getting out of control.”
Co-founder of Valiant Finance
"While the broader market is swimming against the tide, we’re optimistic. Demand may be down overall, but we’re seeing strong momentum because we’re able to help more businesses than traditional, single lenders. Big banks are tightening their criteria and looking for a needle in a haystack, whereas Valiant connects businesses to a wider network of options, giving them a better chance to secure the right finance."
Executive general manager at Equifax
"With three cash rate cuts this year, lower rates have provided some relief for mortgage holders. However they are not a solution to underlying affordability issues created by increasing property prices. Mortgage demand is strong, however we are facing an affordability threshold challenge."
Director at FirstPoint Mortgage Brokers
"[Rate cuts are likely on hold] for the foreseeable future. A cut in the short term just doesn’t make sense. The RBA knows good well [that] we've got a housing supply problem, not a demand problem, and pumping more cash into the system would only fuel inflation.”
