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Banks rush to cut rates after RBNZ slashes OCR 50bp to 4.25%

The Reserve Bank has cut its official cash rate (OCR) to 4.25%, in line with most economists' expectations, and says it's likely to cut further next year.

Wednesday, November 27th 2024, 2:44PM 1 Comment

ASB Bank and Kiwibank immediately published cuts in their lending and deposit rates while Bank of New Zealand swiftly followed. (See the rates change here)

Kiwibank cut its mortgage test rate from 8% to 7.5% “to provide greater financial flexibility for our customers” from Monday, Dec 2 and ASB cut its test rate from 8% to 7.6% from the same date.

With the 50 basis point cut from 4.75%, the central bank trimmed its future OCR projections through to the September quarter of 2026 when it expects it to be 3.2%, down from 3.35% in its last forecasts published in August. It expects the OCR to bottom at 3.1% in the March quarter of 2027.

The central bank has lowered its forecast for the December quarter consumers price index to 0.4% and the annual rate to 2.1% from 0.5% and 2.3% previously respectively.

RBNZ now expects quarterly economic growth to come in at 0.6% every quarter from the March quarter of 2025 through to the June quarter of 2027.

It also expects the annual inflation rate to rise to 2.4% in the December quarter of 2025 before starting to fall again, reaching the mid-point of its 1% to 3% target by the first quarter of 2025 and then again by the June quarter of 2027.

The central bank expects unemployment to peak at 5.2% in the first quarter of 2025 and to then begin to decline slowly to 4.3% by the June quarter of 2027.

“Economic activity in New Zealand remains subdued and output continues to be below its potential.,” RBNZ said.

With inflation returning to the target range, puts the monetary policy committee “in the best position to respond to any shocks to inflation.”

Ahead of the statement, the Finance and Mortgage Advisers Association of New Zealand said any cut would be a welcome Christmas present but that “banks can’t be scrooges and must pass on full cut.”

Tags: OCR

« BREAKING: OCR 4.25% - OCR lowered further as inflation returns to targetSizeable OCR cut expected in February »

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Comments from our readers

On 30 November 2024 at 8:51 am Munt said:
Hardly a rush by banks to cut rates.
Out of the 21 lending options, only Westpac dropped across the board.
Co Op left out 3,4,5year terms from any drop-in rate.
ANZ left out 4- and 5-year terms.
7 other lending institutions only altered floating rates.
So, a paltry 15% took action.
Let's keep it real out there.

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance 8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 5.79 5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard 7.69 6.69 6.39 -
Heartland Bank - Online 6.99 5.49 5.39 5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 6.65 6.40 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora ▼7.39 ▼5.79 ▼5.59 ▼5.69
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 ▼6.69 ▼6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 ▼5.79 ▼5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 ▼5.75 ▼5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - ▼5.89 ▼5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 ▼4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 6.39 6.39
TSB Special 7.39 5.69 5.59 5.59
Unity 7.64 ▼5.79 ▼5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼7.70 ▼5.95 ▼5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.79 5.69 5.69

Last updated: 12 December 2024 9:22am

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