Between November 2021 and May 2023, the Reserve Bank (RBNZ) lifted the Official Cash Rate (OCR) from its all-time low of 0.25% to 5.50% – a level not seen since before the GFC, in 2008.
As a result, these increases in the cost of borrowing flowed through to mortgage rates. In August 2021, the average one-year fixed rate for owner-occupiers on Canstar’s mortgage database was 2.58%. And by January 2024, it was 7.5%.
But, thankfully, peak mortgage pain has passed. Since last August, the RBNZ has cut the OCR eight times, from 5.5% to 2.5%, and banks have reduced their mortgage rates. But whereto from here?
At its most recent meeting, the RBNZ’s Monetary Policy Committee said that it remained “open to further reductions in the OCR as required for inflation to settle sustainably near the 2% target mid-point in the medium term”.
So given the RBNZ’s forecast of possible further OCR cuts, and continuing global economic uncertainty, what are the major banks predicating for the OCR and mortgage rates over the coming months? Let’s take a look.
Below are synopses of the major banks’ outlooks. Click on each bank’s name to jump to a more detailed overview of its predictions. And click here to see where, historically, mortgage rates have sat in relation to the OCR.
- ANZ: Expects one more cuts to the OCR to take it to a low of 2.25% by the end of the year, where it will remain until the end of 2026. Says short-term rates could still fall a little further, but predicts rates to start rising from midway through next year.
- ASB: Predicts one more OCR cut in November, to 2.25%. This means short-term rates of under a year could fall slightly, but that longer term rates have pretty much bottomed out, and could start to increase, as they are sensitive to overseas influences, such as rising inflation in the US.
- BNZ: Thinks the OCR will reach a low of 2.25% by the end of the year, where it will remain throughout 2026. Because OCR hikes are a way off, in terms of having to judge break-even rates and the pros and cons of going short or long, borrowers have some time up their sleeves to make a decision.
- Kiwibank: The OCR will by 2.25% by November, but 2% in February is still a chance if the economy doesn’t start to pick up. However, by the end of this year, we’ll be pretty much at the bottom of the current rate cycle, giving home owners more certainty around fixing their home loan terms and securing the best rates.
- Westpac: In step with the general consensus, expects another cut to the OCR, taking it to a low of 2.25%. As a consequence, the bank thinks very short-term mortgage rates will likely fall slightly but, at current rates, fixing for longer periods of two to three years looks attractive.
Lowest Mortgage Rates for Refinancing
Looking to refinance your mortgage? The table below displays some of the one-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for home owners looking to refinance. This table is sorted by current interest rates (lowest to highest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
Compare Lowest Home Loan Rates for Refinancing
ANZ
As recently as September, the ANZ had thought the OCR would stabilise at 2.5%, but since the recent 50bps cut, it now thinks the RBNZ will carry through with a further 25bps cut in November, taking the OCR to 2.25%. But the bank thinks that will be the end of the current easing cycle.
Below is the ANZ’s September forecast of mortgage rates, when it thought the OCR would plateau at 2.5%:
| Rate | December 2025 | March 2026 | June 2026 | September 2026 | December 2026 | March 2027 |
| Floating | 5.8% | 5.8% | 5.8% | 5.8% | 5.8% | 6.0% |
| 1-Year | 4.6% | 4.6% | 4.8% | 4.9% | 5.0% | 5.1% |
| 2-Years | 4.7% | 4.8% | 4.8% | 4.9% | 5.0% | 5.1% |
| 3-Years | 4.9% | 4.9% | 5.0% | 5.0% | 5.1% | 5.1% |
| 5-Years | 5.4% | 5.4% | 5.5% | 5.5% | 5.6% | 5.6% |
And although the bank’s current special mortgage rates are already lower than the above December predictions …
ANZ’s current special rates
- 1-year: 4.49%
- 2-years: 4.49%
- 3-years: 4.79%
- 5-years: 5.19%
… it’s still interesting to note the predicted rise in rates from mid next year.
For the ANZ notes that “global interest rates aren’t falling” and, while a further OCR cut in November might push short-term rates slightly lower, by mid next year all rates will start to creep higher, along with the OCR returning to a neutral level over 2027.
As a consequence, if you’ve a mortgage, ANZ sees merit in considering splitting your mortgage into chunks and fixing them across a mix of terms.
ANZ’s OCR & Markets Forecast October 2025
ASB
Over the past couple of months, the ASB has revised its OCR floor down from 3% to 2.25%. And because markets are expecting a further OCR cut in November, it thinks that the bias for short-term mortgage rates is slightly lower over the remainder of 2025.
However, it notes that longer-term rates are more susceptible to overseas influences, and that inflation fears, particularly in the US, mean that fixed terms of two years and over will remain flat and possibly start to increase in the near term.
As a result, for those with mortgages, it says that it’s a question of “a bird in the hand or two in the bush”. It says rates could dip lower, but they could also increase quickly, especially if inflation takes off.
Therefore, when it comes to refixing your mortgage, the ASB says that it’s not about trying to predict the bottom of the interest rate cycle. Rather, it’s to fix your mortgage to your financial needs – which includes your tolerance to any interest rate hikes and your flexibility – as well as securing the lowest possible rates.
Searching for the Cheapest Personal Loan?
If you’re looking for the cheapest personal loan, Canstar’s personal loan comparison tables can help. The table below displays the sponsored unsecured personal loan products available on Canstar’s database for a three-year loan of $10,000 in Auckland, with links to lenders’ websites. Use Canstar’s personal loan comparison selector to view a wider range of products on Canstar’s database. Canstar may earn a fee for referrals.
BNZ
For the past few months, the BNZ has been predicting further cuts to the OCR, but also that the rate cutting cycle is entering its final stage.
On the back of the RBNZ’s recent statements, it now forecasts another 25bps cut in November, taking the OCR to a low of 2.25%. As a result, mortgage rates could see some slight downward movement.
Over next year, the bank thinks the OCR will remain static, before nudging higher in early 2027.
In the chart below, you can see the BNZ’s mortgage predictions, and how they’ve changed since January this year.
Overall, the BNZ says borrowers are already stepping away from shorter six-month mortgages, in favour of longer terms: “Mortgage fixing behaviour now appears less sensitive to current relative pricing, and more focused on the risks and opportunities from the shape of the next interest rate cycle.”
However, as OCR hikes are over 12 months away, in terms of having to judge break-even rates and the pros and cons of going short or long, the BNZ says borrowers still have some time up their sleeves before they have to bite the bullet and make a longer-term decision on fixing.
BNZ Fixed Mortgage Rates Forecast August 2025
Kiwibank
Kiwibank’s economists have long called for cuts to the OCR. So they’re happy the RBNZ has finally moved, and are looking forward to a further cut to 2.25%.
However, while the bank hopes that 2.25% is where the OCR bottoms out, and that the economy lifts and further cuts won’t be required, it still thinks a move to 2% in February is a 50/50 chance.
However, by the end of the year, once the OCR hits 2.25%, we’ll be pretty much at the bottom of the current rate cycle, giving home owners more certainty around fixing their home loan terms and securing the best rates.
Westpac
Westpac expects a cut of 25bps at the RBNZ’s November OCR review and says that while further cuts into next year remain a possibility, they aren’t the most realistic scenario.
The bank says that if the RBNZ cuts the OCR as expected, very short-term mortgage rates will likely fall slightly but, at current rates, fixing for longer periods of two to three years looks attractive.
And as mortgage rates bottom out over the next 12 months, Westpac predicts house prices will start to move in the opposite direction. This means, if you’re waiting for the bottom of the housing market, the time to strike could be now!
Westpac OCR Forecast October 2025
Mortgage Rates vs OCR
Looking at current predictions, over the next 12 months the OCR will settle between 2.5% and 3%. So on those forecasts, where can we expect interest rates to sit?
The last time the OCR sat around 2.5%-3%, was 10 years ago, and then the banks’ carded shorter-term rates were just over 5%, which is exactly where they’re sitting now. And as you can see below, even though the OCR did subsequently drop to below 2%, in the years leading up to the pandemic mortgage rates remained pretty static.
So as the banks’ economists point out, although the OCR is expecting one more trim, to 2.25%, you shouldn’t expect a lot more downward movement in current rates.
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About the author of this page
In his role at Canstar, he has been a regular commentator in the NZ media, including on the Driven, Stuff and One Roof websites, the NZ Herald, Radio NZ, and Newstalk ZB.
Away from Canstar, Bruce creates puzzles for magazines and newspapers, including Woman’s Day and New Idea. He is also the co-author of the murder-mystery book 5 Minute Murder.
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