The Official Cash Rate (OCR) is the key interest rate set by the Reserve Bank of New Zealand. It guides how much banks charge to borrow money and how much they pay on savings.

How soon could the OCR fall to 2.5%?

ANZ expects a gradual path toward 2.5%, likely by late-2026. This timing may change if economic data surprises.

Will my mortgage get cheaper?

If the OCR drops, floating and refixing rates should follow—though banks may move at different speeds.

ANZ Tips Lower Interest Rates: What a 2.5% OCR Could Mean for You

ANZ Thinks Interest Rates May Drop—Here’s What That Means for You

The Reserve Bank sets the OCR, guiding borrowing and saving rates nationwide.

Key Takeaways

ANZ economists now expect the main interest rate (OCR) to fall to 2.5%.
They have cut their guess for June-quarter growth to just 0.1%.
Cheaper borrowing could ease mortgage costs but lower term-deposit returns.
The NZ dollar often slips when rates fall, helping exporters but raising import prices.

What Is the OCR?

The Official Cash Rate is a short-hand way of describing the Reserve Bank’s main interest rate. When the OCR moves, banks quickly adjust their own rates on mortgages, business loans and savings accounts.

Why Does ANZ Think It Will Fall?

ANZ says the economy is losing steam faster than expected. High-frequency data (things like card spending and freight volumes) point to a slowdown, so the Reserve Bank may need to add extra “oomph” by pushing rates below the estimated neutral level of about 3%. (This is ANZ’s view. Final decisions rest with the Reserve Bank.)

How Could This Affect You?

Homeowners: If you are on a floating rate—or your fixed rate is about to expire—a lower OCR usually means cheaper repayments. Check with your lender about refix options.
Savers: Term-deposit rates may slide. Spreading maturities (laddering) can smooth bumps.
Investors: Lower rates can boost property and share prices, but returns on cash shrink.
Kiwi Dollar: When rates fall, the NZD often weakens, helping exporters but making overseas holidays more costly.

Looking Ahead

ANZ sees growth picking up again once cheaper money filters through—0.9% growth in 2025, rising to 2.7% by 2027. Keep an eye on jobs data and inflation numbers, stronger-than-expected results could slow or even stop further cuts.

Disclaimer: This article is general information only. It is not personal financial advice. Projections are based on ANZ research dated 24 June 2025 and may change without notice.

📌 About the Author

Kiwi Money Matters is written and maintained by a New Zealand-based writer with hands-on experience in finance and accounting since 2015.

All posts are personally researched, written to ensure clarity and trustworthiness for everyday Kiwis.

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