Interest Rates Are Shifting—What Homeowners Need to Know in 2025
If you have a fixed-term mortgage, now is the perfect time to check if you’re getting the best deal. Here’s what’s happening with interest rates in New Zealand—and what it means for you.
The OCR Is Dropping—Here’s Why That Matters
The Official Cash Rate (OCR) is set by the Reserve Bank of New Zealand (RBNZ) and directly influences mortgage rates across the country. When the OCR goes down, banks usually lower their mortgage rates, leading to lower repayments for homeowners.
As of June 2025, the OCR is currently 3.50%. Experts predict it could drop to 3% by the end of the year, with some forecasts suggesting it could go even lower in 2026.
These reductions are designed to support the economy and make borrowing more affordable for Kiwis.
What This Means for Homeowners
Lower repayments: As banks reduce their mortgage rates, your monthly repayments may decrease, freeing up cash for other priorities.
Refinancing opportunities: Now is a great time to review your mortgage and see if you can switch to a better deal.
More flexibility: Lower rates can help you achieve goals like renovations, debt consolidation, or boosting your savings.
Current Mortgage Rates (as of June 2025)
Here’s a snapshot of the best advertised fixed mortgage rates for borrowers with at least 20% equity:
| Term | Rate (p.a.) | Lender(s) |
|---|---|---|
| 6 months fixed | 5.29% | ANZ, Kiwibank, Westpac |
| 1 year fixed | 4.89% | Kiwibank, Westpac |
| 2 years fixed | 4.95% | ANZ, ASB, BNZ, Kiwibank, Westpac |
| 3 years fixed | 4.99% | Westpac |
Rates may be even lower for borrowers with strong equity or who qualify for special deals.
Refixing vs. Refinancing—What’s the Difference?
Refixing means renewing your current mortgage at a new interest rate with your existing lender when your fixed term ends.
Refinancing means moving your mortgage to another lender, usually to secure a better rate or more favourable terms.
Both options can save you money—and with rates trending down, now is an excellent time to explore them.
The 2025 Budget: What to Expect
The Government’s 2025 Budget, released on 22 May, is focused on keeping the economy stable and supporting lower interest rates. While it’s fiscally cautious, the aim is to maintain affordability for homeowners and encourage responsible lending.
What Should You Do Next?
Check your mortgage: Is your fixed term ending soon? Are you paying more than you need to?
Book a free review: I can help you explore your refixing or refinancing options to ensure you’re not missing out on savings.
Plan for your goals: Whether you want to renovate, consolidate debt, or free up cash, let’s find the right solution for your needs.
Lower interest rates mean new opportunities for Kiwi homeowners. I’m here to guide you—so you can make the most of today’s market and secure the best deal for your family’s future.