In a bigger than expected move, the RBNZ has slashed the OCR today by 50 basis points, bringing it down to 2.50%, as inflation remains near the top of its 1–3% target range. Weak economic activity, flat house prices, and low investment are being offset by recovering household spending and strong commodity prices. Inflation is expected to ease to around 2% by mid-2026, and the Bank remains ready to adjust rates further to keep prices on track.
While markets had fully priced in a cut, the consensus expectation from some major banks was for a 25bp move with guidance toward further easing in November. ANZ had put the probability of a 50bp cut at around 30% likely, so today’s decision represents a front-loaded easing cycle.
The RBNZ’s choice to go big suggests a clear intent to accelerate monetary support, potentially responding to weaker business sentiment data in the latest QSBO release.
For borrowers, this is a significant moment.
“Lower rates make borrowing easier and may open up opportunities for those who have previously struggled to access finance,” says Sarah, Head of Advice. “This might also help free up cash flow, easing financial pressure for many households. If you can afford to keep your repayments at their current level despite the lower rate, that’s one of the most effective ways to pay down debt faster and make meaningful progress on your financial goals.”
Borrowers and property investors had been wanting a large cut, and it’s been delivered. Shaun Harkins, Financial Adviser, says the market narrative heavily favoured a 50 basis point move.
“People have been holding back from fixing over the last 2–3 weeks. All the big banks had adjusted their rate cards downward to reflect somewhere between a 0.25% and 0.50% drop,” Shaun explains. “There’s now a real queue of people enquiring about borrowing capacity and pre-approvals. With most rates now beginning with a 4, this seems to be the rate environment investors and homeowners have been waiting for, where a property investment with a 3 – 4.5% yield can effectively cost very little to hold.”
Lisa McCall, another experienced Financial Adviser here at Properli, has been advising clients to balance short-term flexibility with longer-term certainty.
“I’ve been recommending clients with larger debts to split their lending across 6–24 months, keep some short to pick up any further drops, but also secure some longer-term rates while they’re attractive,” Lisa says. “Banks had already reduced fixed rates ahead of this, and I’m not sure how much lower they’ll go from here.”
While Ryan Orr, our Investment Adviser, says this accelerated easing could have wider market implications.
“A 50bp cut is a clear signal from the RBNZ that they want to move early and decisively. For investors, this may create more favourable conditions for both borrowing and asset performance. We could see renewed confidence in property and equity markets as the cost of capital shifts more rapidly than expected. There was consensus among voting members that 50 bps was the right decision today."
In Summary:
- The RBNZ has cut 50bp to 2.50%, surprising markets.
- This signals accelerated monetary easing aimed at boosting activity.
- Borrowers will likely see further downward movement in fixed rates in the coming weeks.
- Strategic lending structures remain important to capture falling rates while maintaining security.
- Investors may benefit from renewed market confidence.
- NZD fell half a cent immediately on the announcement, short term rates falling further will be driving this.
- The next Monetary Policy Statement and OCR Update is 26 November 2025.
- Consensus among voting members that 50 bps was the right decision today.