Will NZ Mortgage Rates Go Up or Down in 2026?
After cutting rates through 2024 and 2025, the Reserve Bank started raising the OCR again in July 2026. As at early October 2026 it sits at 2.75%. Here's what that means for your mortgage, and how to choose a fixed term without trying to predict the market.
Where the OCR is now
The Official Cash Rate (OCR) is the Reserve Bank's main tool for controlling inflation. After a long run of cuts from August 2024, the Reserve Bank held the OCR at 2.25% in April 2026 and then began raising it as inflation picked up. As at early October 2026, it is 2.75%.
| Decision | OCR |
|---|---|
| April 2026 | Held at 2.25% |
| 8 July 2026 | Raised to 2.50% |
| 2 September 2026 | Raised to 2.75% |
The Reserve Bank has said it is gradually removing stimulus to bring inflation back towards the 2% midpoint of its 1–3% target range. Its decisions, statements and forecasts are published at rbnz.govt.nz.
How OCR changes reach your mortgage
- Floating rates usually move soon after an OCR change, but each bank decides how much to pass on and when.
- Fixed rates are mainly driven by wholesale swap rates, which move on expectations of future OCR decisions. So fixed rates often rise or fall before the OCR moves.
- Your existing fixed rate doesn't change until your term ends. OCR changes affect you when you refix, or on any floating portion.
Choosing a fixed term when rates are rising
| Approach | Works well when | Risk |
|---|---|---|
| Short fix (6–12 months) | You expect your plans or income to change, or you think rates may ease soon. | If rates keep rising, you refix sooner at a higher rate. |
| Medium fix (18 months–2 years) | You want certainty for a reasonable period without a long commitment. | Less flexibility to sell or restructure without a break fee. |
| Long fix (3–5 years) | Your budget is tight and certainty matters more than possible savings. | If rates fall, you're locked in, and breaking can be costly. |
| Split across terms | You want to spread your risk instead of predicting rates. | Some of the loan will always be on a less favourable rate in hindsight. |
Many borrowers split their loan across two or three terms, so not all of it rolls over at once. Keeping a small floating or revolving portion lets you make extra repayments without break fees. See fixed vs floating and the best time to fix.
If your fixed term ends soon
- Start 60–90 days out. Most lenders let you lock a new rate in advance.
- Compare your bank's offer with the market. Retention rates are often better than the advertised rate if you ask.
- Check whether refinancing is worth it. Weigh any cashback against legal costs and clawback. Use the refinance savings calculator.
- Stress-test your budget. Check your repayments at a higher rate with the mortgage calculator.
Our refix playbook covers the timeline step by step.
What to watch
- OCR reviews — the Reserve Bank publishes its decision schedule and each statement on its website.
- Inflation — Stats NZ publishes the Consumers Price Index quarterly. It's the figure the Reserve Bank targets.
- Banks' fixed-rate changes — these often move ahead of the OCR. Our rates page and your adviser can tell you what's on offer now.
This article explains how New Zealand lenders generally assess these situations. It is general information, not personalised financial advice, and lender policy changes often — check your own position with a registered adviser. Official sources: Reserve Bank of New Zealand for lending policy and the OCR, and Sorted.org.nz for independent government-backed money guidance.
Mortgage rates: common questions
Fixed term coming up?
Tell us when your fixed terms end and your loan balance. We'll compare current offers across lenders and suggest a fixed-term mix that suits you.
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