OCR At 2.25% After Six Cuts In 2025 – Experts Forecast Stabilisation Between 2.00% And 3.50% Through 2026

New MoneyHub Guide Explains How Falling Rates Affect Mortgages, Savings, And The Broader Economy

The Reserve Bank has cut the Official Cash Rate (OCR) six times in 2025, bringing it from 5.50% to 2.25%, with economists forecasting stabilisation between 2.00% and 3.50% through 2026, according to analysis by personal finance research website MoneyHub. The cuts have delivered relief for mortgage holders, with fixed rates now available around 5.50% compared to peaks above 7% in 2023, but savers face diminishing returns on term deposits.

"The aggressive cutting cycle is largely complete," said Christopher Walsh, Founder of MoneyHub. "What borrowers need to understand is that rates are unlikely to return to the pandemic-era lows of 2-3% – we're settling into a new normal. And with an election in 2026 and global uncertainty continuing, nothing is guaranteed."

Key points from the analysis include:

• Current OCR: 2.25% (as at 26 November 2025)
• 2025 cuts: Six reductions from 3.75% (February) to 2.25% (November)
• Forecast range: OCR stabilising between 2.00% and 3.50% through 2026
• Inflation: 2.70% CPI – within the Reserve Bank's 1-3% target band
• Next OCR decisions: 18 February 2026, 8 April 2026, 27 May 2026
• Mortgage rate outlook: Fixed rates expected to range from approximately 3.50% to 6.00%

What It Means For Borrowers

Lower rates have increased borrowing capacity, but Walsh cautions against over-extending: "A rate drop doesn't mean housing is affordable – it means you can borrow more. That's not the same thing. House prices may rise as rates fall, offsetting any savings on interest costs."

Short-term fixing (1-2 years) remains popular as borrowers maintain flexibility for potential further cuts while avoiding the risk of locking in longer terms.

What It Means For Savers

Term deposit rates have fallen alongside the OCR, reducing returns for conservative investors. Those relying on interest income face a squeeze – a $100,000 term deposit earning 4.00% now may renew at 3.50%, a $500 annual reduction.

The Bigger Picture

Walsh emphasised the importance of caution: "Taking on debt today is more dangerous than it has been in years, even with lower rates. Economic uncertainty is growing, and the cost of miscalculating can be devastating. If you're in any doubt about borrowing money, don't do it."

The full analysis, including OCR meeting dates, mortgage and term deposit impacts, housing market effects, and economic forecasts, is available in MoneyHub's guide: Interest Rate Predictions

Data Source: Reserve Bank of New Zealand OCR decisions and published forecasts from major bank economists. Consumer Price Index data from Stats NZ.

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