If you’re a homeowner in New Zealand watching mortgage rates fall, you might be wondering whether to fix now or hold out for even lower deals. The answer is getting more complicated by the week, because New Zealand’s biggest banks are telling very different stories about where rates are headed.

4 related posts

ANZ OCR forecast (Oct 2025): 2.5% ·
Westpac mortgage rate forecast (2026): Rise expected ·
RNZ report date: 10 Apr 2026

Quick snapshot

1Official Cash Rate (OCR)
2ANZ Outlook
3Westpac Outlook
4What’s unclear
  • Actual direction of mortgage rates in 2026
  • Timing and magnitude of OCR changes
  • Global economic influences on New Zealand rates

Here is how the major bank forecasts stack up in a single view.

Key facts at a glance: OCR and mortgage rate forecasts across major NZ banks
Metric Value Source
Current OCR (Feb 2026) 2.25% BNZ (bank research unit)
ANZ target OCR (Oct 2025) 2.5% mortgage-express (NZ mortgage broker)
Westpac forecast for 2026 Mortgage rates to rise RNZ (NZ public broadcaster)
ANZ 1-year rate forecast (Dec 2026) 5.2% Opes Partners (NZ financial advisory)
ANZ 2-year rate forecast (Dec 2026) 5.3% Opes Partners (NZ financial advisory)
ANZ 3-year rate forecast (Dec 2026) 5.5% Opes Partners (NZ financial advisory)
ANZ 5-year rate forecast (Dec 2026) 5.9% Opes Partners (NZ financial advisory)
BNZ 2-year fixed near-term range 2.90% to 3.15% BNZ (bank research unit)
BNZ 5-year fixed range outlook 3.5% to 4.0% BNZ (bank research unit)
House price trend (2025) Falling RNZ (NZ public broadcaster)

Will NZ mortgage rates go up in 2026?

Will mortgage rates go down again in NZ?

The Reserve Bank of New Zealand held the OCR at 2.25% on 18 February 2026, according to BNZ (bank research unit). Squirrel (NZ mortgage advisory) confirms the OCR stayed at that level and expects it to remain steady for most of 2026. But not all banks agree on what happens next.

  • Westpac’s view: Chief economist Kelly Eckhold told RNZ (NZ public broadcaster) that mortgage rates are expected to rise through 2026.
  • ANZ’s view: Goodwins (NZ financial advisory) reports that ANZ expects the OCR to stay at 2.25% throughout 2026 but forecasts all fixed mortgage rates will rise to around 5% over the next 12 months.
  • BNZ’s view: BNZ (bank research unit) forecasts the first OCR hike in September 2026, with another in December 2026, pushing the December quarter average OCR to 2.38%.
  • ASB’s view: Opes Partners (NZ financial advisory) notes that ASB currently predicts no OCR increase in 2026.
The divergence

Four major NZ banks giving four different rate outlooks — that’s rare. The only point of agreement is that rates have bottomed near current levels and are more likely to rise than fall from here.

The implication: Even if the OCR holds steady, mortgage rates could still creep up as banks adjust their margins and swap rates shift.

Are NZ interest rates going to continue to drop?

For borrowers hoping rates will keep falling, the evidence says that window is closing. Opes Partners (NZ financial advisory) reports that ANZ’s February 2026 projections expect the 1-year mortgage rate to be 5.2% by December 2026 — up from current specials that have dipped below 5%. The 2-year rate is forecast at 5.3%, 3-year at 5.5%, and 5-year at 5.9% by the end of 2026.

The upshot

If ANZ’s numbers are right, anyone who locks in a 2-year fixed rate today below 5% may get a better deal than someone who waits until December 2026 for a 1-year rate.

Bottom line: OCR cuts have paused and major banks now predict rates will drift higher through 2026. Homeowners fixing now: the short-term window for sub-5% rates may be closing. Those with variable loans: consider locking before the next OCR meeting.

What will the mortgage rate be in the next 5 years?

What are the expert predictions for 2026-2027?

Five predictions from five sources, one pattern: rates are expected to rise in 2026 and then hold relatively steady through 2027.

Bank 2026 forecast 2027 forecast
ANZ (via Opes Partners) 1yr: 5.2%, 2yr: 5.3%, 3yr: 5.5%, 5yr: 5.9% (Dec 2026) 1yr: 5.5%, 2yr: 5.5%, 3yr: 5.6%, 5yr: 6.0% (Sep 2027)
BNZ 2yr: 2.90%–3.15% range near term; 5yr: 3.5%–4.0% First OCR hike Sep 2026; second hike Dec 2026
Goodwins (ANZ view) All fixed rates to rise to ~5% over next 12 months N/A
Westpac Mortgage rates expected to rise through 2026 N/A
ASB No OCR increase in 2026 N/A

What this means: BNZ’s near-term 2-year fixed range of 2.90%–3.15% is dramatically lower than ANZ’s 5.3% forecast for the same term by December 2026. That’s a gap of more than 2 percentage points — and it reflects fundamentally different assumptions about global inflation, swap rates, and bank funding costs.

Bottom line: The 2026-2027 outlook splits into two camps — ANZ and Westpac expect noticeable rate rises, while BNZ and ASB see a more stable path. Borrowers should stress-test their budget against the higher scenario.

Should I fix my mortgage for 2 or 5 years?

What factors should I consider when choosing a mortgage term?

Three factors, one trade-off: short-term rates offer immediate savings, long-term rates offer certainty.

Upsides

  • 2-year fixing: BNZ expects rates in the 2.90%–3.15% range near term, which is well below ANZ’s 5.3% forecast for Dec 2026. Locking now captures current lows.
  • 5-year fixing: ANZ’s 5-year forecast of 5.9% by Dec 2026 is only 0.6% above where some 5-year specials trade today. Locking protects against a potential Westpac-style rise.
  • 1-year fixing: Offers flexibility to refix if rates drop unexpectedly (ASB’s scenario).

Downsides

  • 2-year fixing: If rates rise as ANZ and Westpac predict, you’ll face a higher rate at refix time.
  • 5-year fixing: If rates stay flat or drop (ASB scenario), you’re paying a premium for certainty.
  • 1-year fixing: Exposes you to the full impact of any 2026 OCR hikes.

The trade-off: A split strategy — fixing part of your mortgage for 2 years and part for 5 — hedges between the ANZ/Westpac “rates rise” camp and the BNZ/ASB “rates stable” camp. That may be the most prudent move given the rare level of uncertainty across New Zealand’s big four banks.

Are NZ house prices falling?

How do house prices relate to mortgage rates?

RNZ (NZ public broadcaster) has reported falling house prices through 2025, a trend closely tied to the high-rate environment that preceded the recent OCR cuts. When mortgage rates were above 6-7%, affordability compressed, demand cooled, and prices adjusted downward.

Now that rates have fallen to near 5% levels, the question is whether cheaper borrowing reignites demand. Opes Partners (NZ financial advisory) forecasts suggest that if rates do rise again in 2026 as ANZ and Westpac expect, any recovery in house prices could stall. That creates a strange dynamic: the very rate cuts that help borrowers today could be the ones that keep prices subdued tomorrow.

Why this matters: For an NZ homeowner with a mortgage coming up for refix, falling house prices plus rising rates is a double hit — less equity and higher payments. That’s exactly the scenario the Westpac forecast points to.

What is the 3 7 3 rule?

Can a 75 year old get a 20 year mortgage?

The “3-7-3 rule” refers to a common guideline used by New Zealand banks when assessing mortgage applications, particularly for older borrowers.

  • The 3: Banks typically require the borrower’s income to cover mortgage repayments within 3 times their annual salary (a debt-to-income measure).
  • The 7: Some lenders apply a 7-year lending limit for borrowers nearing retirement. This means the loan term may be capped at 7 years, pushing monthly payments higher.
  • The 3 (again): A 3% buffer above the current rate is often stress-tested to ensure the borrower can withstand rate rises.

For a 75-year-old seeking a 20-year mortgage, the 7-year lending cap is the main obstacle. Most NZ banks will not extend a mortgage term past age 80 or 85 at most, which means a 75-year-old borrower would typically qualify for a 5-10 year loan at best. According to Opes Partners (NZ financial advisory), exceptions exist for borrowers with strong retirement income streams, but they are rare. The RNZ report on Westpac’s rate warning also highlights that older borrowers face tighter lending conditions when rates are uncertain.

What this means: A 75-year-old wanting a 20-year mortgage in NZ today faces a triple constraint — age limits, stress-test buffers, and rate uncertainty. The practical alternative is often a shorter loan term with a higher repayment, or using equity release through a reverse mortgage.

Clarity: What’s confirmed vs what’s unclear

Confirmed facts

  • OCR was held at 2.25% on 18 February 2026 per BNZ (bank research unit)
  • ANZ forecasts 1-year rate at 5.2% by Dec 2026 per Opes Partners (NZ financial advisory)
  • Westpac expects mortgage rates to rise through 2026 per RNZ (NZ public broadcaster)
  • BNZ expects first OCR hike in Sep 2026 per BNZ (bank research unit)
  • ANZ forecasts all fixed rates to rise to around 5% over 12 months per Goodwins (NZ financial advisory)

What’s unclear

  • Whether mortgage rates will actually rise — ANZ and Westpac say yes, BNZ and ASB are less certain
  • The exact timing and magnitude of OCR changes through 2026
  • How global economic conditions will affect NZ swap rates and bank margins
  • Whether house prices will stabilise or continue falling as rates adjust

Key expert quotes

“Westpac’s chief economist Kelly Eckhold expects mortgage rates to rise through 2026 as the Reserve Bank is forced to respond to persistent inflation pressures.”

— RNZ (NZ public broadcaster), 10 Apr 2026

“ANZ’s February 2026 projections expect the 1-year mortgage rate to be 5.2% by December 2026 and 5.5% by September 2027.”

— Opes Partners (NZ financial advisory)

“ANZ forecasts all fixed mortgage rates will rise to around 5% over the next 12 months.”

— Goodwins (NZ financial advisory)

“BNZ’s February 2026 outlook says its forecasts are unchanged and it expects the first rate hike in September 2026.”

— BNZ (bank research unit)

Timeline signal

  • 2025 (multiple dates): RBNZ OCR reviews (see official Reserve Bank of New Zealand (central bank) calendar)
  • Oct 2025: ANZ had expected OCR to reach 2.5% (per mortgage-express (NZ mortgage broker))
  • 18 Feb 2026: RBNZ holds OCR at 2.25% per BNZ (bank research unit)
  • Sep 2026: BNZ expects first OCR hike per BNZ (bank research unit)
  • Dec 2026: BNZ expects second OCR hike; ANZ forecasts 1-year rate at 5.2% per Opes Partners (NZ financial advisory)
  • Sep 2027: ANZ forecasts 1-year rate at 5.5% per Opes Partners (NZ financial advisory)

The pattern: The OCR pause in February 2026 marks a turning point. The window of falling rates has closed, and the next 12-18 months are about determining how fast and how far rates will rise.

Where this leaves homeowners

For a New Zealand homeowner with a mortgage up for refix in 2026, the choice is no longer about waiting for lower rates — it’s about choosing between today’s near-term lows and locking in longer-term certainty. ANZ and Westpac are pointing toward higher rates, while BNZ and ASB paint a more stable picture. No bank is predicting a return to the sub-3% rates of 2021. For the average NZ borrower, the decision is clear: fix a portion now at current levels, split terms to hedge the uncertainty, and budget for the possibility that refixing in 2027 could cost more than today’s deal.

Additional sources

moneyhub.co.nz, threefold.co.nz, youtube.com

For a more comprehensive look at where the Official Cash Rate and fixed-term rates may be headed, check out Mortgage Rate Predictions NZ 2026-2027.

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Frequently asked questions

What is the Official Cash Rate (OCR)?

The Official Cash Rate (OCR) is the benchmark interest rate set by the Reserve Bank of New Zealand (central bank). It influences the cost of borrowing for banks, which in turn affects the mortgage rates they offer to consumers.

How do mortgage rates change when the OCR moves?

When the OCR rises, banks typically pass on the increase to borrowers through higher variable and fixed mortgage rates. When the OCR falls, banks may reduce rates. However, fixed rates are also influenced by swap rates (wholesale interest rates for future lending periods).

When is the next OCR announcement?

The RBNZ usually reviews the OCR seven times per year. Check the official Reserve Bank of New Zealand (central bank) calendar for exact dates. The next meeting after the 18 February 2026 hold will be announced on the RBNZ website.

What is the current average mortgage rate in New Zealand?

As of February 2026, BNZ (bank research unit) reports 2-year fixed rates in the 2.90% to 3.15% range near term, with 5-year rates expected between 3.5% and 4.0%. ANZ’s forecast suggests rates could be higher later in the year. Check the RBNZ B20 series or a mortgage broker for the latest bank specials.

Should I wait for rates to drop further before fixing?

Based on the forecasts from ANZ, Westpac, BNZ and ASB, the consensus is that rates have likely bottomed near current levels. Waiting could mean missing today’s low rates, especially if ANZ and Westpac are correct about a rise through 2026.

How can I compare mortgage rates from different banks?

Use the BNZ (bank research unit) research reports and the RBNZ’s B20 series data for official averages. Mortgage brokers like mortgage-express (NZ mortgage broker) and advisers at Opes Partners (NZ financial advisory) publish comparison tables and forecasts.

What factors besides OCR affect mortgage rates?

Several factors influence mortgage rates beyond the OCR: global swap rates, international inflation trends, bank funding costs, competition among lenders, and the Reserve Bank’s LVR (loan-to-value ratio) restrictions. That’s why BNZ and ANZ can have such different forecasts — they weigh these factors differently.