The Official Cash Rate, or OCR, is the number behind most of the interest rate news in New Zealand. It's also the starting point for many of the mortgage rates you'll be offered. Here's what it is, how the Reserve Bank uses it, and why it doesn't affect every loan in the same way.

What the OCR is

The OCR is the rate banks charge each other for overnight loans. The Reserve Bank of New Zealand (RBNZ) sets a target for it, and the rate moves in steps. The usual step is a quarter of a percentage point, although bigger moves have happened.

How the Reserve Bank uses it

The RBNZ's main job is to keep inflation under control. It does that mostly by changing the OCR:

  • When inflation is too high, the RBNZ raises the OCR. Borrowing gets more expensive, people and businesses spend less, and price pressure eases.
  • When inflation is low or the economy is weak, the RBNZ cuts the OCR. Borrowing gets cheaper, which encourages spending and investment.

Changes take time to work through the economy, so the RBNZ moves carefully and watches the data between decisions.

When it's decided

The RBNZ reviews the OCR about every six to eight weeks, or seven times a year. Each decision is announced in a press release. A full Monetary Policy Statement, which explains the reasoning and the outlook, comes out a few times a year. The dates are published in advance on rbnz.govt.nz, so you can plan around them.

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How it reaches your mortgage

The OCR doesn't set your mortgage rate directly. What it does is shift the costs banks face, and how quickly those costs reach you depends on the type of loan.

  • Floating rates usually move with the OCR, and often fairly quickly. Banks don't always pass a change on in full, or at the same speed, so it's worth checking what your bank actually does.
  • Fixed rates are mainly set by swap rates. Those reflect where financial markets expect the OCR to go over the next few years, as well as what banks pay to fund their lending. Fixed rates can rise or fall before the RBNZ acts, which is why a fixed rate can go up while the OCR is still unchanged, or fall ahead of a cut.

Where it stands now

At the time of writing, the OCR is 2.75%, set on 28 October 2026. The next decision is due on 9 December 2026. Check rbnz.govt.nz for the latest figure before you act on it, because the OCR changes between decisions.

What it means if you're buying

  • Don't build your purchase around one decision. A quarter-point move changes repayments by a modest amount. Your deposit, income and the house itself matter more.
  • Check your repayments at a higher rate than today's. Your lender will usually test your application at a higher rate already, but work out the number for yourself so you know how much room you have.
  • Think about the mix. Many borrowers split their loan between fixed and floating terms. Ask your mortgage adviser how the split changes how much a rate move affects you.

For the steps that come after finance is sorted, see the first home buyer guide.