The Reserve Bank of New Zealand has today held the Official Cash Rate steady at 2.25%. Whether you’re an existing mortgage holder or looking to buy your first home, a hold is often misread as “nothing to see here” – but it can actually be one of the more useful moments to review your position. Here’s why.

What does today’s decision mean?

A hold means the Reserve Bank has decided not to raise or lower the cash rate at this review. For mortgage holders, it offers a brief reprieve, but not a reason to stand still.

We’re operating in an environment of significant economic uncertainty, with ongoing geopolitical pressures — including the conflict in the Middle East — continuing to drive volatility in global markets and adding to inflationary pressures here in New Zealand.

Against that backdrop, today’s hold is welcome breathing room for mortgage holders, but it’s unlikely to be the full picture. Rates could yet move further, and the factors driving them are broader than the OCR alone.

What’s driving the decision?

In its Monetary Policy Statement released alongside today’s decision, the RBNZ cited the Middle East conflict as having materially altered New Zealand’s inflation and growth outlook — with the OCR likely to increase at coming meetings.

“The New Zealand economy was on a clear recovery path — until fuel prices skyrocketed following the Middle East conflict. The amount of cash this has already pulled out of the economy is significant.

How that conflict plays out will be the biggest determinant of how far and how fast rates move from here. The RBNZ has signalled that increases are likely at coming meetings, and with inflation projected to peak at 4.3% later this year, that’s not surprising.

A quick resolution that restores oil supply could limit the scale of those increases. A prolonged conflict, however, could drive further supply constraints, pushing oil prices and inflation higher still, creating real pressure on household budgets and the broader economy.

Either way, the question for mortgage holders isn’t really whether rates will move, it’s whether you’re prepared when they do.”

— Nigel Perkins, Head of Haven Mortgages

What should you be thinking about?

If you’re on a floating rate:

• Floating rates are unlikely to move as a direct result of today’s announcement — though banks can and do adjust rates based on a range of factors beyond the OCR, so it’s worth keeping an eye on
• With further rate rises possible, a hold is a good moment to consider your options — whether that’s fixing to lock in some certainty or structuring your loan across multiple terms to protect yourself against different rate scenarios
• Talk to a Haven Mortgage Adviser now — don’t wait for the next announcement to prompt you

If your fixed term is expiring soon:

• Today’s hold gives you a moment to make your refixing decision without the added pressure of an OCR movement — but the broader environment means acting sooner rather than later is wise
• Most banks will allow you to lock in a rate up to 60 days before your fixed term expires, so you don’t need to wait until your refix date to act
• Compare what’s available across lenders, including possible cash-back offers — some banks offer these to win your business, and they’re worth factoring into your decision.
• Your refix is also an opportunity to review your overall loan structure — splitting across different terms can provide a level of built-in protection if rates continue to move, rather than putting everything on a single term at a single point in time. Talk to a Haven Mortgage Adviser to understand what’s right for your situation

If you’re mid-fixed term:

• Your repayments are fixed until your term expires, so today’s announcement has no direct impact on what you’re paying right now
• That said, the broader economic environment means it’s worth getting ahead of your next refix rather than waiting until you’re close to the date — understanding your options early puts you in a stronger position
• If rates look likely to rise further before your term expires, it may also be worth exploring whether breaking your current fix and refixing now makes financial sense — a Haven Mortgage Adviser can run the numbers on break costs versus potential savings to help you make that call
• Either way, now is a good time to start the conversation — get in touch and we can help you plan ahead

If you’re in the process of buying your first home:

• Today’s hold removes one source of immediate pressure — but with broader economic uncertainty and further rate rises possible, it pays to move with purpose rather than wait for conditions to settle
• Getting clarity on what you can borrow and what your repayments would look like at current rates is an important first step — the sooner you have that picture, the better placed you are when the right property comes up
• Haven Mortgage Advisers specialise in helping first home buyers navigate the whole process from start to finish — find out how we can help, including signing up to our First Home Buyer emails here. 

When a hold isn’t really a hold

Today’s announcement may say hold — but the broader picture tells a more complex story. Geopolitical uncertainty, inflationary pressures, and factors beyond the OCR mean that mortgage holders who sit back and wait for the next announcement may find themselves with fewer options than those who act now.

Haven Mortgage Advisers can help you make sense of what today’s decision means for your specific situation — whether that’s reviewing your current structure, modelling different fixing scenarios, or simply understanding what your options are before the next announcement lands.

Ready to talk?

Complete the contact form or give us a call — our Mortgage Advisers are here to help you make the right call for your situation.

This article is intended as general information only and does not constitute financial advice. Please speak with a Haven Mortgage Adviser for advice tailored to your personal circumstances.