PHOTO: New Zealand’s mortgage market is on the move. FILE
By Property Noise NZ | Real Estate News.
💥 Is now the time to fix, float or wait?
With the Reserve Bank slashing the Official Cash Rate (OCR) to 3.25%, New Zealand’s mortgage market is on the move — and we’re making bold calls about where interest rates are heading next.
Disclaimer: This article reflects the opinions and predictions of Property Noise NZ and is intended for informational purposes only. It does not constitute financial advice. We strongly recommend consulting a qualified financial advisor before making any decisions regarding mortgages, investments, or property purchases.
👉 Missed the OCR news? Catch up here:
🔗 OCR Cut to 3.25% – What It Means for Your Mortgage & the Property Market
📊 What’s Happening Right Now?
On the heels of softening inflation data, weaker GDP growth, and a cooling labour market, the Reserve Bank of New Zealand (RBNZ) has blinked — and interest rates are officially heading down.
At its latest Monetary Policy Review, the RBNZ cut the OCR to 3.25% — marking the first major downward shift in the current cycle and sending a loud signal to markets: we’re back in easing mode.
📈 So… Will Mortgage Rates Drop?
✅ Yes — but slowly at first, then all at once.
We predict that the average 1-year fixed mortgage rate, currently sitting around 6.5%, will fall to below 5% by early 2025 — and possibly into the high 4% range by Q3 2025.
“The worst is over. We believe Kiwis will see significant mortgage relief in 2025 — especially if global economic trends hold,” – Property Noise NZ Editorial Desk
🧠 What the Experts Are Saying:
📌 Infometrics Chief Forecaster Gareth Kiernan has echoed this sentiment, saying in a recent note:
“As inflation continues to ease and domestic demand remains subdued, there’s room for the Reserve Bank to cut the OCR further in 2025. We expect mortgage rates to trend lower in response.”
🔮 Our Bold Mortgage Rate Predictions for 2025:
| Quarter | 1-Year Fixed | 2-Year Fixed | Floating |
|---|---|---|---|
| Q1 2025 | 5.25% | 5.50% | 7.00% |
| Q2 2025 | 4.95% | 5.25% | 6.75% |
| Q3 2025 | 4.75% | 5.10% | 6.50% |
| Q4 2025 | 4.65% | 5.00% | 6.25% |
📌 Note: These are Property Noise NZ internal predictions based on market sentiment, historic OCR cycles, and inflation outlook.
🏠 What Does It Mean for Property?
This easing in mortgage rates could have significant knock-on effects:
🔹 First-home buyers may re-enter the market in larger numbers
🔹 Investor activity could pick up, especially in Auckland and Wellington
🔹 Refinancing boom expected as borrowers rush to re-fix lower
🔹 Listings may tighten, creating upward price pressure again
“While the market won’t go crazy overnight, we do expect a gradual lift in confidence — and eventually, prices.”
💡 Should You Fix or Float?
It depends on your appetite for risk. Here’s a quick guide:
| Situation | Recommendation |
|---|---|
| You’re coming off a high fixed rate soon | Consider short-term fixed to ride the fall |
| You need maximum certainty | Lock a 2-year fixed, but avoid long-term |
| You’re in a good equity position | Consider floating or split to capitalise on drops |
🧠 Final Word from Property Noise NZ:
The tide is turning.
With global interest rate pressures easing and the RBNZ no longer in tightening mode, 2025 is shaping up to be the year of mortgage relief.
We’re keeping a close watch — and we’ll continue to bring you the fastest, sharpest takes in New Zealand real estate.
👉 Stay ahead. Stay noisy.
🔗 Read more: OCR Cut to 3.25% – What It Means for Your Mortgage & the Property Market