New Zealand Mortgage Rates Decrease: 2025 Forecast & Rates

Anyone watching mortgage rates this year has seen a steady drumbeat of good news. The official cash rate has been cut nine times since August 2024 to 2.25%, according to the Reserve Bank of New Zealand, and ASB trimmed its two-year fixed rate to 4.69% in October 2025. Yet fixed rates remain well above the 3% lows of the pandemic years. The nine cuts tell only part of the story — the rest is swap rates, bank funding, and what forecasters expect next.

Official Cash Rate: 2.25% after nine consecutive cuts since August 2024 · ASB two-year fixed rate: 4.69% (October 2025) · OCR cuts since August 2024: 9 · Monthly repayment on $500k at 4.69%, 30-year: ≈ $2,590

The checkpoints below share one pattern: the OCR has fallen steadily, and fixed rates have followed at a slower, steadier pace.

Are mortgage rates going down in NZ?

Yes — and the trend has been running for more than a year. The Reserve Bank started cutting the official cash rate in August 2024, and each cut has eventually shown up in advertised home-loan rates.

Current fixed-rate movements

• ASB now offers a two-year fixed rate of 4.69% and a three-year fixed rate of 4.99% (MortgageRates (rate tracker)).
• The RBNZ said in July 2025 that mortgage and deposit interest rates had continued to decline, reflecting a lower OCR, strong bank liquidity, and soft credit growth (Reserve Bank of New Zealand (central bank)).

Fixed rates have been drifting down in steps rather than jumps. The pattern is typical of New Zealand’s mortgage market: floating rates react to the OCR almost immediately, while fixed rates move when wholesale funding costs — swap rates — shift.

That’s why the advertised “special” rates change so often in the weeks around an OCR decision.

OCR pass-through to floating and fixed rates

Floating rates typically move within days of an RBNZ decision. Fixed rates adjust over roughly a week as banks reprice their swap-based funding books.

So when the OCR falls from 3.25% to 2.25%, a floating borrower feels most of that decline. A fixed borrower only feels it when their term ends and they refix at the new market rate — which is why the RBNZ has stressed that the average rate on the stock of mortgages will keep declining as borrowers refix (Reserve Bank of New Zealand).

Major bank rate changes in October 2025

• In October 2025, banks cut fixed rates ahead of the Reserve Bank’s decision (RNZ (public broadcaster)).
• ASB led the visible moves, taking its two-year rate to 4.69% and its three-year to 4.99% (MortgageRates (rate tracker)).

The October round of cuts mattered less for their size than for their timing. Banks moving before the RBNZ’s announcement signaled that swap markets had already priced in the next easing step.

The pattern: the OCR sets the direction, but the swap market sets the pace. Until swap rates stop falling, expect fixed mortgage rates to keep drifting down.

Will mortgage rates drop to 3% again?

The question borrowers keep asking. Three percent mortgages were real during the pandemic, and the nine cuts since August 2024 have made them feel possible again. But the gap between 2.25% and 4.69% is not just central-bank policy — it’s funding costs.

When were mortgage rates last at 3%?

• During 2020–2021, fixed mortgage rates fell to record lows, with two-year rates near 2.5–3% — the same period when the OCR sat at emergency levels (MoneyHub (money comparison site)).
• Those rates were the product of a crisis response: a slashed OCR, quantitative easing, and banks pricing for a deeply uncertain economy.

The 3% era also came with a catch: it was brief. Once inflation took hold, the RBNZ reversed course and rates climbed for two years straight.

Swap rates and bank funding costs

Swap rates reflect where financial markets expect the OCR to average over the term of the loan, plus a margin for bank funding costs. When markets expect rates to stay low for years, swaps fall and fixed mortgage rates follow.

Right now, markets see a lower OCR ahead but not a sustained emergency-level OCR. That keeps swap rates — and therefore fixed mortgage rates — well above the pandemic lows.

What forecasters say about the low point

• Canstar’s analysis points to one- and two-year fixed rates easing slightly from current levels — not collapsing toward 3% (Canstar (rate comparison service)).
• ANZ’s read of the May 2025 OCR track had the rate bottoming at 2.85% before drifting back to 3.1% by mid-2028 (ANZ economics (May 2025 RBNZ review)).
• Kiwibank economists described the current OCR as “stimulatory,” which points to more cuts ahead but not a 3% mortgage rate (Kiwibank (bank economics team)).

None of the reviewed forecasts predict a return to 3% fixed mortgages by 2027. To get there, swap rates would need to price in something close to another crisis — and no major forecaster is arguing for that.

The trade-off: cheaper fixed rates are still on the table, but a 3% mortgage is not the base case. The realistic window is “lower than today,” not “back to 2021.”

How much will I repay for a $500,000 mortgage in New Zealand?

This is the number that matters more than the rate itself. A $500,000 mortgage is close to New Zealand’s median loan size, so the repayment math below is a fair starting point for a typical buyer or refixer.

Repayment formula explained

• Divide the annual rate by 12 to get the monthly rate. For 4.69%, that’s about 0.391% per month.
• Multiply the term in years by 12 — a 30-year loan has 360 monthly payments.
• Apply the standard amortisation formula: monthly repayment = principal × monthly rate ÷ (1 − (1 + monthly rate)^−360).
• For personalised numbers, use the RBNZ’s standard mortgage rate data or a mortgage calculator; comparison sites such as MoneyHub publish both (MoneyHub (money comparison site)).

Principal-and-interest repayments stay fixed for the term of the loan. Interest-only loans are cheaper each month but don’t reduce the principal — a trade-off worth being honest about.

Example at 4.69% over 30 years

Loan: $500,000 · Rate: 4.69% p.a. · Term: 30 years · Monthly payment: ≈ $2,590

At the rate ASB advertised in October 2025, a $500,000 mortgage costs roughly $2,590 per month for principal and interest (Canstar (rate comparison service)).

Rate sensitivity check: at 5.69%, the same loan costs about $2,900 a month — roughly $310 more, every month, for a 1-point rate difference.

How rate changes affect your payment

• Every 1 percentage point on a $500,000, 30-year loan adds roughly $310 per month.
• Rate changes only hit fixed borrowers at refix time; floating borrowers feel them at the next payment date.
• The RBNZ expects the average rate on the stock of mortgages to keep falling as borrowers refix at lower one- and two-year rates (Reserve Bank of New Zealand).

Timing matters. A borrower who fixed for two years in mid-2023 at over 6% is now refixing into the mid-4s — a swing of more than $700 a month on a $500,000 loan.

Why this matters: rate movements of this size are not a rounding error in a household budget. They are the difference between a comfortable year and a tight one.

What is the NZ mortgage interest rate forecast for 2027?

Forecasts get less reliable the further out they reach, but the central bank’s own projection is a useful anchor. As of late 2025, every official and bank signal points the same way: lower for a while, then a slow drift back up.

RBNZ OCR projections

• The RBNZ’s February 2025 Monetary Policy Statement projected the OCR would continue to decline through 2025 (Reserve Bank of New Zealand (February 2025 statement)).
• By November 2025, that projection had materialised: the OCR stood at 2.25% after nine cuts (Reserve Bank of New Zealand).

The RBNZ’s own track is not a promise — it is a projection conditioned on the economy evolving as expected. But it sets the baseline every bank’s pricing model starts from.

Market pricing for 2026–2027

Market pricing embeds that shallow V. It is why banks can offer a 4.69% two-year fix even though the OCR is 2.25%: the market expects rates to stay low, but not emergency-low, over the next two years.

Bank forecast roundup

• ANZ expected a 25bp cut at the August 2025 MPS, followed by further easing as risks tilted toward inflation running too low (ANZ economics (July 2025 RBNZ review)).
• Canstar sees one- and two-year fixed rates easing slightly from current levels (Canstar (rate comparison service)).
• No major forecast in the reviewed sources projects a return to 3% mortgage rates by 2027.

Put those three together and the picture is consistent: modest further falls in fixed rates, then a floor — followed by a slow rise as the OCR normalises. For a bank-specific picture, see our BNZ mortgage rates 2026 guide.

The implication: plan for rates that stay in the 4s through 2026 — and expect them to start climbing again well before 2028, not after.

What are the latest mortgage rates in NZ?

Advertised rates change quickly, so here’s where the market stood as of the October 2025 repricing round — and how to read official data so you’re not relying on one bank’s marketing page.

ASB’s latest rate changes

• ASB cut its two-year fixed rate to 4.69% and its three-year to 4.99% in October 2025 (MortgageRates (rate tracker)).
• The moves came ahead of the Reserve Bank’s decision, part of a wider repricing round across banks (RNZ (public broadcaster)).

Banks dropping rates before the RBNZ meets is a normal tell: it means swap markets already moved, and the bank is pricing for the cut it expects, not the one already delivered.

RBNZ B20 standard interest rate data

• The RBNZ’s B20 series tracks the average standard mortgage rates advertised by New Zealand banks (Reserve Bank of New Zealand (interest-rate data)).
• The same statistics hub publishes wholesale interest rates, which show what banks pay to fund fixed lending (Reserve Bank of New Zealand (interest-rate data)).

The B20 average is slower-moving than advertised “specials” because it includes standard rates across all banks and terms. It is the closest thing to an official market benchmark for mortgage pricing.

It is also the reference the RBNZ itself uses when it says the average rate on the stock of mortgages will keep declining as borrowers refix (Reserve Bank of New Zealand).

How to compare rates across banks

• Compare the same term, the same loan-to-value ratio, and the same repayment type — otherwise you’re comparing apples with oranges (MortgageRates (rate tracker)).
• Check the RBNZ B20 average to see whether a bank’s special is actually a market-beating rate.
• Use comparison editors such as MoneyHub, which publish daily tables of advertised fixed rates (MoneyHub (money comparison site)).

Rates vary by bank, term, and borrower equity. A borrower with 20% equity will see a different rate from someone with 10% or 40%.

The catch: the advertised rate is the starting point for negotiation, not the final offer. Banks frequently discount below their published numbers for borrowers who ask. For the seasonal picture, see our New Zealand winter mortgage rates forecast.

How have NZ mortgage rates changed over the last 10 years?

Ten years of New Zealand mortgage rates can be summarised in four phases: stable, crisis-cheap, aggressively expensive, and now falling. Each phase left its mark on how borrowers think about fixing.

The 2015–2020 stable period

• Two-year fixed rates sat around 4–5% for most of the mid-2010s (MoneyHub (money comparison site)).
• The OCR moved within a narrow band, and mortgage rates followed with very little drama.

This period trained a generation of borrowers to fix for two years at a time, because the market barely moved.

Record-low rates in 2020–2021

• The pandemic pushed the OCR to emergency lows and fixed rates to record lows near 2.5–3% (Reserve Bank of New Zealand (policy record)).
• Borrowers who fixed for two or three years in 2020–2021 were positioned perfectly — until they refixed in 2023.

The 2021 lows were the exception that changed the rule: they convinced a wave of borrowers that a 3% mortgage was normal. It wasn’t.

The 2021–2023 tightening cycle

• The RBNZ raised the OCR sharply from late 2021 to mid-2023 to fight inflation (Reserve Bank of New Zealand).
• Fixed mortgage rates pushed above 6%, and some borrowers who fixed at 3% faced a threefold increase in interest cost at refix time.

That period produced the “mortgage stress” headlines of 2023 — and it is the reason rates moving back down has felt so consequential for household budgets.

The easing cycle beginning August 2024

• The RBNZ made its first OCR cut in August 2024, ending a two-year tightening phase (Reserve Bank of New Zealand).
• By November 2025, the OCR was 2.25% — nine cuts in a row, with the average mortgage rate falling steadily in between (Reserve Bank of New Zealand).
• ANZ’s review of the May 2025 policy meeting documented the 25bp cut to 3.25% and a projected path bottoming at 2.85% (ANZ economics (May 2025 RBNZ review)).

The easing cycle has been faster than the tightening cycle it reversed. That speed is exactly why borrowers who stayed floating in 2025 have largely benefited — and why fixed borrowers are refixing at much lighter repayment loads.

Four decision points, one direction: the table below shows how quickly the official cash rate fell from 3.75% to 2.25% — and why each step took time to reach fixed mortgage borrowers.

The pattern: the tightening cycle of 2021–2023 took two years to push rates above 6%. The easing cycle dismantled most of that in about 15 months — but fixed-rate borrowers only feel it when their term ends.

Mortgage rate timeline: 2020–2025

The road to today’s rates runs through five moments.

• 2020–2021: Mortgage rates hit record lows near 3% as the OCR fell to emergency levels (Reserve Bank of New Zealand).
• Late 2021 – mid 2023: The RBNZ raises the OCR aggressively; fixed rates climb above 6% (Reserve Bank of New Zealand).
• August 2024: The easing cycle begins with the first OCR cut (Reserve Bank of New Zealand).
• October 2025: ASB cuts its two-year fixed rate to 4.69% (MortgageRates (rate tracker)).
• November 2025: The OCR reaches 2.25% after nine consecutive cuts (Reserve Bank of New Zealand).

What this means: the timeline shows a market that has already repriced most of the easing. The remaining question is how low the OCR goes before wholesale markets start pricing the next rise.

What’s confirmed and what’s still uncertain

Separating the two keeps the rate outlook honest.

The balance of evidence: the direction is not in doubt — the destination is. Treat any forecast of a specific OCR low point as a scenario, not a certainty.

What the experts are saying

“The official cash rate is stimulatory.”

Kiwibank economists, on the rate outlook after the October 2025 cuts (Kiwibank)

“The track implies a cut in either July or August, plus another 15 basis points of easing thereafter.”

ANZ economics, reviewing the RBNZ’s July 2025 hold (ANZ (July 2025 review))

“One- and two-year fixed rates could fall slightly from current levels.”

Canstar rate analysis, on the 2026 fixed-rate outlook (Canstar (rate comparison service))

Nine OCR cuts have taken the cash rate to 2.25%, yet the market’s real debate is whether fixed rates fall far enough to matter for someone refixing a $500,000 loan. The evidence points to lower-but-not-ultra-low: Canstar sees slight further falls, ANZ’s track bottoms near 2.85%, and no reviewed forecast predicts a return to 3% mortgage rates. For borrowers refixing in early 2026, the choice is clear: lock in a two-year rate near 4.69% while it’s available, or ride a short floating term and hope swap rates keep falling — with the risk that they don’t.

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• BNZ mortgage rates NZ 2026: current rates, predictions & guide
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