Big banks clash on OCR outlook as ANZ tightens
ANZ, New Zealand’s largest bank, is raising its fixed home loan rates on terms from one to five years by 10 to 20 basis points, including popular one- and two-year fixes. The two-year special climbs from 5.09% to 5.29%, while the one-year special moves from 4.59% to 4.69%, RNZ reported.
The changes follow ANZ’s updated official cash rate (OCR) track, with chief economist Sharon Zollner now expecting the OCR to rise three times this year, potentially starting as early as July. Markets have already pushed the two-year swap rate from about 2.85% to above 3%, as investors price in higher future mortgage rates.
ANZ managing director for personal banking Grant Knuckey (pictured) said the new pricing reflects wholesale cost pressures.
“Lower interest rates have flowed through to customers with around 82% of our home loans on a rate below 5%,” Knuckey said, noting that a large share of customers are ahead on repayments and encouraged to talk to the bank if they are worried.
ASB warns low-rate era is over as big banks diverge on OCR
The ANZ move comes as ASB warns that the low point in mortgage rates has passed and flags the next phase of the mortgage rate cycle, even though the OCR remains at 2.25%. The bank still sees “upward pressure on mortgage rates” as the Reserve Bank prepares for its next tightening phase.
Across the major banks, OCR views are clearly split. ANZ now expects three 25bp hikes in July, September, and October, lifting the cash rate to 3% and holding it there through 2027. Kiwibank’s economists are urging the RBNZ not to follow that path, warning that further tightening would be “tone deaf, and potentially reckless”, and arguing that earlier moves and softer growth should be enough to pull inflation back towards 2%. ASB’s baseline keeps the OCR at 2.25% for longer before a modest tightening phase from late 2026, while Westpac now expects hikes to begin around September, with steady 25‑basis‑point moves taking the cash rate into towards neutral near 3.5% and peaking at about 4.25% in 2027–28.
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