What the November OCR Cut Means for You and What’s Next in February

At Mortgage Mates, we know the numbers behind the mortgage can seem like a mystery, so let's break down what the latest OCR change means for everyday Kiwis.

What is the OCR?

The Official Cash Rate (OCR) is set by the Reserve Bank of New Zealand (RBNZ) and acts as a tool to control inflation and influence economic activity. It’s the rate at which banks borrow money from the central bank. When the OCR is high, borrowing becomes more expensive, slowing down spending. When it’s low, borrowing becomes cheaper, encouraging spending and investment.

On November 27, the RBNZ cut the OCR by 50 basis points to 4.25%—a bold move aimed at easing financial pressure on households and businesses. This is especially important as inflation has been cooling off, currently sitting at 2.2%, which is within the RBNZ’s target range​

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Why Does the OCR Matter for You?

If you have a mortgage, particularly a floating or short-term fixed-rate loan, this OCR cut could mean lower interest rates in the near future. Banks typically adjust their mortgage rates in response to OCR changes, so you might see a reduction in your monthly repayments. This is a welcome relief for many Kiwis as the cost of living remains high and economic uncertainty persists.

For first-time homebuyers, this cut could open new doors. Lower interest rates mean you may be able to afford a larger loan or make lower monthly payments. However, it’s important to consider potential risks—economic conditions can change, and interest rates could rise again in the future.

What’s Coming in February?

The next OCR review is scheduled for February 19, 2025. This will be an important date, as the RBNZ will reassess economic conditions and decide if further changes are necessary. Analysts will be watching inflation trends, global economic factors, and domestic spending to see whether another rate cut or a pause is on the horizon.

At Mortgage Mates, we’re keeping a close eye on these developments to ensure we provide you with the best advice. Whether you’re thinking about refinancing, buying your first home, or just curious about how these changes affect you, we’re here to guide you.

Let’s talk about how this OCR cut can work for you. Get in touch with us today—your mates in homeownership have your back!

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