Mortgages
Mortgages
3 min read
Interest rate report #15 - 9th July '25
The Reserve Bank hit pause today, holding the OCR at 3.25%—its first break from cuts in a while.
Why stop now? What does this mean for interest rates?
Here is your monthly interest rate report
This gives you a quick, plain English update on how much your mortgage costs.
TL;DR
- The Reserve Bank hit pause – the first time in a year.
- Banks have (pretty much) stopped cutting interest rates
- But, you’ll likely get a lower interest rate anyway
Just before we get into the interest rates. Big news today from the Reserve Bank. The OCR remains the same. No cut.
Why has the Reserve Bank stopped cutting?
Today, the Reserve Bank left the OCR at 3.25%. It’s the first time they’ve stopped cutting in a while.
But why stop now? Well, the Reserve Bank has been cutting to speed up our weak economy.
Lowering the OCR cuts interest rates. A lower interest rate means a cheaper mortgage.
And when your mortgage is cheaper … you have more money you can spend on other things.
So, cutting the OCR stimulates spending. You and I can spend and get the economy going.
But, there’s an issue.
If the Reserve Bank cuts the OCR, sure, interest rates fall.
But if you just fixed your interest rate for a year … it might not be another 11 months until you roll off and can get that lower rate.
So, cutting the OCR has a lag effect. It takes time for those interest rate cuts to flow through to you and me.
After all, we’ve all fixed our interest rates for different times.
So even if the Reserve Bank stops cutting the OCR right now … their work still has an effect.
Around 75% of mortgages will refix their interest rate over the next year. And a record 25% will refix in just the next 3 months.
On average, it takes 6–18 months for OCR cuts to fully work their way through the economy.
So the Reserve Bank can afford to take its time.
Even if they stop cutting … the economy will speed up.
Take my colleague Ed, for example.
He’s got a $376,000 mortgage. The interest rate is coming up for renewal. He fixed that rate just before the Reserve Bank started cutting.
He’s about to go from 6.94% down to 4.89%. That saves $148 a week.
So the Reserve Bank can afford to say: “Let’s see what happens when all these interest rates refix … before we do anything more.”
They’ve already done the work (cutting the rates) … they want to see the result of that before they go any further.
So even if you’re not feeling it now, your next refix could come with a chunky saving.
Right. Let’s get back to how much interest rates have changed in the last month.
Interest rates have (pretty much) stopped falling
Interest rates are basically unchanged compared to last month.
The 6-month rate fell just 0.01%. The average 1-year rate is down 0.02%.
The largest interest rate drop was the 4-year rate. Just a 0.06% drop.
If that’s the largest drop … that’s saying something.
That’s because the banks have already priced in most the Reserve Bank’s OCR cuts.
No room for negotiation. No back-door discounts
The banks will sometimes advertise one interest rate … but offer you a lower (discounted) rate when you go to refix.
It’s hard to see these discounts as a borrower. So, I like to share what we’re seeing at Opes Mortgages.
Almost all discounts have evaporated. The average discount off the 18-month rate is 0.06%.
So the average bank advertises 4.94% but behind the scenes, it cuts it down to 4.89%.
That’s small.
The median discount off the 1-year is 0.02%.
To put that into context, that saves you less than $2 a week on a half-million-dollar mortgage.
What are the lowest interest rates in the market?
The lowest rate in the market is now 4.85%. That’s for both the 1-year and the 18-month.
Not a lot of change from the previous month. But in the best case scenario, these are the absolute lowest rates I am seeing in the market:
Need help with your mortgage?
Got a question about your mortgage?
Hit reply and let me know your situation. I’ll come right back to you to see if my team can help.
Cheers,
Pete
Peter Norris
Mortgage broker for over 10 years, property investor and Managing Director at Opes Mortgages
Peter Norris, a certified mortgage adviser with 10+ years of experience, serves as the Managing Director at Opes Mortgages. Having facilitated over $1.2 billion in lending for 2000+ clients, Peter is a respected authority in property financing. He's a frequent writer for Informed Investor Magazine and Property Investor Magazine, while also being recognized as BNZ Mortgage Adviser of the Year in 2018 and listed among NZ Adviser's top advisers in 2022, showcasing his expertise.
