Rate cut signals opportunity for brokers and borrowers
The Monetary Policy Committee’s vote was 4-2 in favour of the cut, with some members even considering a larger 0.5% reduction. This “downwards bias” signals that further rate cuts are likely in the coming months.
Economists see more easing ahead
Cotality NZ’s Kelvin Davidson (pictured top left), explained, “The committee also discussed a rate hold as well as a 0.5% cut, with the vote ending up 4-2 in favour of the 0.25% drop. This menu of options has a ‘downwards bias’ and suggests that they envisage further rate falls yet.”
“It seems fair to conclude from these projections that another one or even two OCR cuts lie ahead, with the first potentially delivered at the next MPS on 26th November. The Reserve Bank’s own forecast track for the OCR has it reaching a trough of somewhere close to 2.5% by the middle of next year.”
Westpac’s Kelly Eckhold (pictured top right) noted, “The OCR forecast of 2.71% for the December quarter implies at least one cut in the OCR at the next meeting in October, with around a 50% chance of a follow-up cut at the November meeting.”
Kiwibank’s Jarrod Kerr (pictured lower left) added, “The RBNZ are back in the game! After pausing in July, the RBNZ have cut the cash rate a further 25bps to 3%... But more importantly, the RBNZ has signalled further cuts to come. The OCR track was lowered a massive 30 points from a bottom of 2.85% to 2.55% in March 2026.”
ASB’s Nick Tuffley (pictured lower right) agreed. “The RBNZ cut the OCR by 25bp to 3%, consistent with the policy guidance that the RBNZ signalled back in the May MPS,” Tuffley said. “The vote split was 4-2 in favour of a 25bp cut versus a 50bp cut. An easing bias was maintained.”
Housing market: Modest gains, but subdued outlook
Economists expect only a modest boost for the housing market.
“The housing market effects from today’s decision are likely to be small,” Davidson said. “If anything, the possibility of more falls in mortgage rates than previously thought could lift activity and house prices a bit.
“But those rate changes may be fairly minor. And in the meantime, as the RBNZ has indicated, the economic and labour market outlook is still disappointing, which will tend to weigh on housing, as it’s already doing.”
LJ Hooker’s Mathew Tiller added, “Lower borrowing costs will only accelerate this momentum. Buyers are re-engaging, sellers are seeing stronger competition, and we expect spring to deliver a much more active housing market.”
What it means for mortgage brokers
For mortgage brokers, the latest cut and the RBNZ’s dovish outlook open up new opportunities.
“For mortgage advisers, a rate cut presents opportunities to review and refinance existing loans, guide clients on mixed term strategies, and help buyers prepare for potentially faster moving, more competitive conditions.”
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