Australia's four major banks will raise variable home loan rates by 0.25 percentage point from Nov. 13, passing on in full the Reserve Bank of Australia's increase in its cash rate to 4.85%, the highest level since November 2008. ANZ, CommBank, NAB and Westpac all set the same effective date, according to a lender tracker kept by comparison site Finder, which by Wednesday listed 23 lenders passing on the move.

For investors in Asia, the pass-through matters on two fronts. It locks in another step up in funding costs for a mortgage book that dominates the balance sheets of Australia's listed banks, and it adds pressure to a housing market that has already fallen for seven straight months. Holders of Australian bank shares, residential mortgage-backed securities and the Australian dollar are watching how quickly households absorb the extra cost.

RBA's fifth hike of 2026 split the board

The RBA board voted 6-3 on Tuesday, Nov. 3 to lift the cash rate by 25 basis points from 4.60%, according to Savings.com.au. Three members preferred to hold. It was the fifth increase this year, after moves in February, March, May and September.

The board said inflation was broadly based and likely to stay above 3% for longer than it had expected, Savings.com.au reported, citing stronger domestic capacity pressures and higher fuel prices. Underlying inflation ran at 3.7% in the year to September after a stronger-than-expected quarterly consumer price report. The RBA targets inflation of 2% to 3%. Bond traders focused on the split vote.

Smaller lenders moved first. BankVic and Southern Cross Credit Union lifted rates from Nov. 5, while Aussie and Unity Bank follow on Nov. 6 and BOQ, ME and Virgin Money on Nov. 7, Finder's tracker showed. St.George, Bank of Melbourne, BankSA, Bankwest and Pepper Money match the big four on Nov. 13. Macquarie Bank has set the latest date on the list, Nov. 19.

What the hike costs Australian borrowers

The cost has built up quickly. Finder estimates that a borrower with the average home loan of $730,719 now pays $538 a month more than in January, or about $6,460 a year, assuming each of this year's hikes is passed on in full. On a $1 million loan, the monthly increase since January is $737. For a $500,000 mortgage, the November move alone adds roughly $80 a month, according to Savings.com.au.

The squeeze also reaches what new buyers can borrow. Nicola Powell, chief residential economist at Domain, has estimated that each 25-basis-point rise cuts borrowing capacity by about 2.5%, she told Savings.com.au.

The big four's cheapest variable rates already started with a 6 after the September hike. When those increases took effect on Oct. 9, Westpac's lowest variable rate rose to 6.24% from 5.99%, removing the last big-bank rate below 6%, Australian Broker reported at the time. The other three majors' lowest rates ranged from 6.29% to 6.5%, with CommBank's at 6.34%. Another full 0.25-point increase on Nov. 13 would take Westpac's lowest rate to 6.49%.

Finder's Taylor Blackburn, a personal finance specialist, estimated that the average borrower could save about $115 a month by switching to a cheaper rate. Banks must give at least 20 days' written notice before debiting higher repayments, according to Australian Broker, which cited Canstar's Sally Tindall as saying most lenders allow two to three months.

Housing market braces for a longer squeeze

The pass-through lands on a falling market. National home prices have declined for seven consecutive months and sit 4.3% below their peak, Angus Moore, senior economist at realestate.com.au, told Savings.com.au. He said higher mortgage costs would keep weighing on household spending and slow growth. Other indexes show a deeper fall, including Cotality's October figures.

Forecasters do not agree on what comes next. In Finder's survey of 40 economists and experts, 30 correctly predicted the November increase, and 11 expect at least one more rise, most of them in February 2027. Among the major banks, CBA and NAB expect a pause after November, Westpac sees no change in December but a higher risk of another increase if inflation does not ease, and ANZ, the most hawkish, sees a further hike as possible in December or February, Savings.com.au reported.

Powell said the larger uncertainty lies beyond November. "Persistent inflation leaves the door open to further tightening," she said.

The RBA board meets next on Dec. 7 and 8. Before then, borrowers at the big four will see the new rate on Nov. 13 and Macquarie customers on Nov. 19.