It’s been pretty quiet across the interest rates landscape of late, as everyone watches and waits for the Reserve Bank’s upcoming Official Cash Rate (OCR) verdict on 8 October.
Every few days at the moment, it seems, we’re being hit with a fresh wave of weak economic data—with the latest being a negative 0.9% GDP result for the June 2025 quarter, announced on 18 September.
That was worse even than the 0.3% to 0.5% contraction the market was predicting—although it is backward-looking, of course, and the good news is that things feel like they may have started to turn a corner since then.
In light of all that, the expectation for this next OCR announcement is very much that we're in for another reduction.
That will flow through to mortgage rates over month or two following—and should bring the one-year rate (currently at 4.70%) down to around 4.50%, or potentially even lower.
So, what does that mean for anyone refixing or settling on a new mortgage in the coming weeks?
It really depends on your personal situation.
Given where rates are at, there’s no harm in going ahead and locking in now. Splitting your mortgage across a mix of shorter- and longer-terms is still a good option—putting you in a position to benefit from both interest rate certainty, and anticipated rate falls.
If you’re not too fazed at the thought of paying a bit extra in the short-term you might choose to float for the next few weeks—just until further rate falls have flowed through to the market.
Check in again next week for the latest on New Zealand interest rate news.
