New Zealand’s OCR has dropped to 2.5%!

OCR update: what a move to 2.5% could mean for you

The Reserve Bank of New Zealand (RBNZ) has reduced the Official Cash Rate (OCR) to 2.5%, a move designed to further stimulate the economy following the larger than expected drop in GDP for the June quarter.

This comes as the RBNZ prepares for a change in leadership, with Dr Anna Breman set to become Governor on 1 December 2025. While she hasn’t started yet, a new Governor may bring a slightly different tone to future decisions.

The Great Refix – why acting early matters

We’re still in the thick of the Great Refix, with billions of dollars of fixed-term home loans rolling off each month. Acting before your rate expires can help you:

• Avoid default rollover rates that may be higher.
• Access cashback offers or sharper fixed deals while they’re available.
• Restructure other debt (credit cards, personal loans) at lower rates.

Why this matters for homeowners

Refinancing opportunities
A drop of this size can make a noticeable difference. On a $600,000 home loan, a cut of 0.50% could save $80–$200 per month depending on your new rate.

Banks sharpening offers
Lenders often compete more aggressively when rates are falling – but the sharpest deals can disappear quickly if demand surges.

Peace of mind
While waiting for deeper cuts may seem appealing, locking in a competitive rate now could protect you if the market reverses or banks tighten lending criteria.

For investors and property buyers

• Cheaper borrowing: A lower OCR can improve cash flow for existing landlords and make new investments more affordable.
• Market dynamics: If cuts continue, property demand could lift, and prices could rise. Early movers may secure better value.
• Portfolio planning: Investors with multiple properties may want to review structure and consolidate lending while rates are dropping.

Savers, KiwiSaver & other investments

• Deposit rates likely to fall: Savings and term deposits often adjust quickly to OCR cuts, so cash returns may shrink.
• KiwiSaver strategy: A lower-rate environment can affect long-term returns. Checking your fund and risk level now can keep your retirement savings on track.
• Diversification: Shares, bonds, or managed funds may offer more growth potential if cash rates trend down.

What to do next

• Check when your fixed term ends – don’t wait until the rollover date.
• Run your numbers with our Loan Repayment Calculator to see how new rates could affect repayments.
• Talk to an Apex Advice adviser to decide on your next move. If you book an appointment before 31^st October you can also be in to win a $500 Briscoes gift card as part of our Season to Make Your Move competition. T&Cs apply.

What is the OCR? 

The Official Cash Rate (OCR) is set by the Reserve Bank of New Zealand and acts as a benchmark for interest rates across the country. When the OCR drops, borrowing usually becomes cheaper, affecting home loans, savings, and overall economic activity. It’s one of the main tools the RBNZ uses to control inflation and support economic stability. 

Want to dive deeper? Visit the Reserve Bank of New Zealand’s website for more info.