Reserve Bank Governor Michele Bullock told the Senate Economics Legislation Committee on 28 October 2026 that inflation "will therefore likely be higher than was our base case in August", in her opening statement to Senate estimates. It came less than a week before the Monetary Policy Board meets on 2 and 3 November. For car loan applicants, the statement is less about guessing the decision and more about where rate rises actually reach your application: through a mortgage repayment far more than through the car loan rate itself.
This article summarises what the Governor said, compares it with the latest figures, and works through a labelled example of how this year's rate rises flow into a car loan assessment. It is general information, not financial advice, and it does not predict the November decision.
What the RBA Governor told Senate estimates
From the Governor's opening statement on 28 October 2026:
- Rates this year: the cash rate target has risen by a cumulative 100 basis points in 2026, including the 25 basis point rise in September.
- Inflation outlook: the August forecasts had inflation returning to around the middle of the 2 to 3% target range in late 2027. Since then, she said, some upside risks "have materialised or are materialising", and inflation will likely be higher than that August base case.
- Why: global energy prices are much higher than assumed in August because the Middle East conflict has re-escalated, and short-term inflation expectations are elevated. She also pointed to domestic capacity pressures, saying the labour market "seems a little tighter than we had previously judged" despite unemployment rising a little more than expected.
- Housing: housing prices have fallen in most capital cities and new housing loans have declined, though prices are around 50% higher than in early 2020. She said only a small share of borrowers are in negative equity or facing severe repayment difficulty, and that monetary policy does not target housing prices.
- Next week: a key question for the Board is "whether the tightening in monetary policy to date will be sufficient to bring inflation back to target in a reasonable time."
That last line is a question the Board will consider, not an announcement. The statement does not say what the Board will decide, and nor do we.
How the statement compares with the latest data
The Governor described recent inflation as "around 3½ to 4 per cent in year-ended terms." The ABS Consumer Price Index for September 2026, released the same day at 11:30am AEDT, showed annual inflation of 4.3%, up from 4.0% in August, with trimmed mean inflation at 3.6%. Our article on September 2026 inflation and your car loan covers the fuel and electricity rises behind that figure.
The RBA cash rate table confirms the 100 basis points: rises effective 4 February, 18 March, 6 May and 30 September 2026 took the target from 3.60% to 4.60%, with holds in June and August. On housing, the ABS Total Value of Dwellings for the June quarter 2026 showed the mean price of residential dwellings fell by $8,200 to $1,100,400 over the quarter. We looked at what falling property values mean for borrowing power when those figures came out.
Worked example: where 100 basis points lands in a car loan application
This is an illustration using assumed figures, not a quote and not a forecast. It assumes a lender passed the full 1 percentage point of cash rate rises through to a variable mortgage, which each lender decides for itself.
- Mortgage: $600,000 owing over 30 years, principal and interest. At an assumed 5.75% the monthly repayment is about $3,501. At 6.75% it is about $3,892, roughly $390 a month more.
- Car loan: $30,000 over 5 years. At an assumed 8% the monthly repayment is about $608. At 9% it is about $623, roughly $14 a month more.
The same 1 percentage point costs this household about 27 times as much a month on the mortgage as it would on the car loan. Put another way, $390 a month is roughly the repayment on $19,200 of car loan at 8% over 5 years (our calculation). For a homeowner with a variable mortgage, the bigger effect of this year's rises on a car loan application is the higher mortgage commitment, not the car loan rate.
That matters because Moneysmart explains that lenders look at your income, bills and other commitments and may decline an application if other debts reduce your capacity to repay. A higher mortgage repayment is one of those commitments. You can test your own figures with our loan repayment calculators.
What the November decision can and cannot change
Car loan rates are set by each lender and do not move one for one with the cash rate, as we explain in why car loan rates don't follow the cash rate. A fixed rate car loan you already hold keeps its agreed rate. After the September rise, we tracked when home loan rate increases took effect, which is the change that most often reaches a car loan assessment.
The RBA calendar lists the decision statement and the Statement on Monetary Policy, with updated forecasts, at 2:30pm AEDT on Tuesday 3 November, and the Governor's media conference at 3:30pm AEDT. That day is Melbourne Cup Day, a public holiday in Victoria. Our checklist for the RBA November 2026 meeting sets out what to check on a quote or pre-approval before then.
Checks for car loan applicants this week
- Know your mortgage type. If your home loan is variable, check your lender's notices and your current repayment, because that figure goes into your application.
- Leave room in the budget. A repayment that only just fits today leaves no buffer if a commitment rises.
- Read your quote's terms. Note the rate, the comparison rate, whether it is fixed and when the offer expires. Our guide to car loan pre-approval explains what a conditional approval does and does not lock in.
- Compare lenders. Lenders price and assess differently. See current car loan rates, our lender reviews and the car loans page.
Where to check the figures
The Governor's comments come from the RBA's Opening Statement to the Senate Economics Legislation Committee (28 October 2026). Rate history comes from the RBA cash rate table and meeting times from the RBA calendar. Inflation figures come from the ABS Consumer Price Index, Australia, September 2026, dwelling prices from the ABS Total Value of Dwellings, June quarter 2026, and lender assessment from Moneysmart. All were checked on 30 October 2026. The worked example is our own calculation using the stated assumptions.
