PHOTO:🏦 BANKS UNDER PRESSURE AFTER OCR CUT — WILL MORTGAGE RATES FINALLY DROP? Finance Minister Nicola Willis. FILE
Finance Minister Nicola Willis has issued a direct message to New Zealand’s banks following yesterday’s Official Cash Rate (OCR) cut:
👉 “Pass on as much as possible.”
The Reserve Bank lowered the OCR by 25 basis points to 2.25% — the lowest level since June 2022 — sending a clear signal that cheaper borrowing should be on the way.
Banks reacted quickly, trimming some floating mortgage rates on Wednesday. But Willis says that’s not enough.
OCR DROP TODAY: WHAT IT REALLY MEANS FOR NZ HOUSE PRICES IN 2026
📣 “PASS THOSE RATES ON” — WILLIS CALLS FOR MORTGAGE RELIEF
Speaking at a trade and investment event in Auckland, Willis said the Reserve Bank would closely monitor how banks respond to the cut, but stressed that ordinary Kiwi mortgage-holders deserve the benefit.
“My message to the New Zealand banks is a very clear one: pass on as much as possible.”
She emphasised that when banks lower rates, the whole economy benefits:
“When you do, that makes a significant difference to our economy. And actually, as some of New Zealand’s biggest businesses, you have a stake in this economy. So pass those rates on.”
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📉 OCR AT 2.25% — LOWEST IN OVER THREE YEARS
The reduction brings the OCR to its lowest point since mid-2022, reflecting the central bank’s confidence that inflation pressures are easing.
The Reserve Bank described inflation risks as “balanced” — a sign that rate cuts are likely stabilising the economy without overstimulating it.
💡 WILL HOMEOWNERS FEEL THE DIFFERENCE?
Millions of Kiwi borrowers are waiting for mortgage relief as rising living costs, insurance, rates, and food prices continue to bite.
Willis says the signs are positive:
✔ Inflation expected to drop further in 2026
✔ Economic conditions forecast to improve
✔ Cost-of-living pressures easing
✔ Mortgage rates likely to fall if banks respond
“Conditions are going to get easier for a lot of New Zealand workers and families.”
She added that all indicators point toward a stronger 2026, but accepts Kiwis won’t believe economic improvements until they see them in their own budgets.
💬 “YOUR EFFORTS ARE NOT IN VAIN” — WILLIS PRAISES KIWI RESILIENCE
Addressing the public directly, Willis acknowledged the tough years New Zealanders have endured:
“New Zealanders have been very resilient. Your efforts are not in vain… we have better times ahead of us.”
But whether those better times include meaningful mortgage relief depends on the banks — and how much of the OCR cut they choose to pass on.
🏁 BOTTOM LINE: PRESSURE IS NOW ON THE BANKS
With the OCR at a fresh low and inflation easing, borrowers are looking for real movement on mortgage rates.
Willis has made the government’s stance clear:
👉 Kiwis need relief — and banks must deliver it.
All eyes are now on the major lenders to see if they respond.
SOURCE: RNZ