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RBNZ holds OCR at 3.25%. Key Take-aways for Borrowers and Savers.

Today’s Monetary Policy Review delivered what most economists expected: a pause at 3.25%. Inflation sits at 2.5%, but the Bank wants more comfort before cutting again.

Our view:
Floating debt: floating and revolving loans should reprice to follow OCR within a few days - some or all of the 25bps cut.
Fixed rates: Already pricing in - we don't expect 1-2 year rates to move much.
Deposits: Saver rates are slipping, expect rate cuts to flow through to deposit rates quicker than mortgage rates.

To do:
Review any fixed loan due within six months.
Savings - can that cash be put to better use elsewhere? Don't leave lots of cash sitting in savings or term deposits for the long term.

Up next: 20 Aug is the next MPR. A further 25 bps cut will be on the table if global trade frictions don’t flare up.

Read more here: https://www.multiplynz.com/post/ocr-on-hold-what-it-means-for-your-home-loan

This post is general commentary and does not constitute personalised financial advice

Multiply

Reserve Bank cuts OCR to 3.25%

Great news for mortgage holders! The RBNZ has delivered another 25 basis point cut today, bringing the Official Cash Rate down from 3.50% to 3.25%. This is the 6th consecutive cut since August last year.

What this means for YOU:
✅ Floating mortgage rates dropping immediately
✅ On a $500k mortgage, you're saving about $300/fortnight compared to the peak
✅ 1year fixed rates starting to reduce below 4.99%
✅ More cuts potentially coming - economists predict OCR could hit 2.50-2.75% by year-end

Acting Governor Christian Hawkesby says they're watching global uncertainty closely and have "scope to lower further as appropriate."

🏦 Major banks already responding - talk to us now if you want a comparison!

Remember: while great for borrowers, savers will see lower returns on deposits. Consider your options carefully.

What do you think - will rates go even lower? 🤔

https://www.multiplynz.com/post/reserve-bank-cuts-ocr-to-3.25-as-global-uncertaint

Today’s Budget introduces two headline reforms:

1. KiwiSaver reset
• Govt member tax credit halved; removed for > $180 k incomes.
• Default & minimum contributions climbing to 4 % (phased).
• Scheme expanded to 16- & 17-year-olds.

2. Investment Boost
• Immediate 20 % deduction on productive-asset purchases (plant, machinery, tech, commercial buildings).
• Treasury estimates a 1 % GDP lift within two decades, at a fiscal cost of NZ$1.7 b p.a.

Take-aways
✔️ Employees: model the impact of 4% KiwiSaver and update your financial forecasts as 4% will make a significant difference to your retirement wealth long-term.
✔️ Younger employees - consider joining KiwiSaver if you're not in it already; an extra two years compounding will go a fair way.
✔️ Investors: revisit retirement projections without the full MTC.
✔️ Business owners: consider what qualifying capex will make your business more productive / grow faster - 20% up-front deduction will help.

See more:
🔗 https://lnkd.in/grfZNThs

Happy that we’ve been able to get this across the line and welcome to all our new clients!

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