Oct 26, 2026 · 2 min · 2 segments
It's OCR week again, and many economists are expecting an increase. But what does that mean for home loans? Money correspondent Susan Edmunds has been looking at it and spoke to Ingrid Hipkiss.
Susan Edmunds
Ingrid HipkissHost
Floating rates obviously move with the OCR, but there could be a bit more pressure even on some of the slightly longer term rates, pressure from domestic pressure and internationally as well.
A lot of the planned increase in the OCR has been priced into the market already, as we always say, particularly on the longer term.
And I know people always say to me, why do you talk about home loan rates? You know, savings rates matter too.
But the interesting thing with home loan rates is that it does tend to affect people's spending behaviour a bit more than the savings side of the equation does.
So what is the outlook from here then? Well, it looks like a two-year fix may work out to be a little bit cheaper than rolling one years.
It's often the case that a series of one-year fixes or choosing the cheapest rate in the market every time has worked out to be the best strategy.
But at the moment, one-year rates don't have to move very much to make a two-year fix cheaper over two years.
And you also, I guess, need to think about how much you value certainty.
agreement, though, on whether the increase is necessary at this point? Not 100%.
So KiwiBank's chief economist, Jared Kerr, says he wouldn't be hiking in this kind of economy because, you know, growth is just getting started in most parts of the country.
Shamabu Yakub, too, said he thought it would drag out the downturn, which has been long and miserable for lots of people.
But other people say the Reserve Bank's just really wary about inflation getting away from them again and then having a bigger problem to try to contend with, which we saw not that long ago happened.
So it would rather take the path of least regrets, I guess, and smack it down before it gets a chance to get carried away.
Floating rates obviously move with the OCR, but there could be a bit more pressure even on some of the slightly longer term rates, pressure from domestic pressure and internationally as well.
A lot of the planned increase in the OCR has been priced into the market already, as we always say, particularly on the longer term.
And I know people always say to me, why do you talk about home loan rates? You know, savings rates matter too.
But the interesting thing with home loan rates is that it does tend to affect people's spending behaviour a bit more than the savings side of the equation does.
So what is the outlook from here then? Well, it looks like a two-year fix may work out to be a little bit cheaper than rolling one years.
It's often the case that a series of one-year fixes or choosing the cheapest rate in the market every time has worked out to be the best strategy.
But at the moment, one-year rates don't have to move very much to make a two-year fix cheaper over two years.
And you also, I guess, need to think about how much you value certainty.
agreement, though, on whether the increase is necessary at this point? Not 100%.
So KiwiBank's chief economist, Jared Kerr, says he wouldn't be hiking in this kind of economy because, you know, growth is just getting started in most parts of the country.
Shamabu Yakub, too, said he thought it would drag out the downturn, which has been long and miserable for lots of people.
But other people say the Reserve Bank's just really wary about inflation getting away from them again and then having a bigger problem to try to contend with, which we saw not that long ago happened.
So it would rather take the path of least regrets, I guess, and smack it down before it gets a chance to get carried away.
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