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RBNZ keeps the cash rate unchanged; but expects further cuts READ ON Dismiss
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Borrowers holding out for more cuts

While one bank economist thinks home loan rates won't go much lower, even if the RBNZ makes one or two more cuts, a significant number of borrowers are holding out for lower interest rates. [READ ON]

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Reserve Bank increases OCR to 6.75%

The Reserve Bank has increased the Official Cash Rate (OCR) by 25 basis points to 6.75%

Thursday, March 10th 2005, 9:13AM
The Reserve Bank has increased the Official Cash Rate (OCR) by 25 basis points to 6.75%.

Speaking at the release of the Reserve Bank's March 2005 Monetary Policy Statement, Reserve Bank Governor Alan Bollard said: "In our December and January reviews we emphasised that inflation was expected to remain toward the top of the 1 to 3% target band over the medium term, providing little headroom to absorb additional inflation pressures. We also projected a near-term economic slowdown which was expected to constrain inflation consistent with the Policy Targets Agreement. With the economy remaining very strong and resources becoming increasingly stretched, we assess that a further tightening of policy is now necessary.

"The momentum in today's economy is underlined by the continuing vigorous employment growth through December and by ongoing high levels of business and consumer confidence. Investment remains at record levels, our terms of trade remain very favourable and exports are generally holding up well despite the high exchange rate.

"Our revised economic projections incorporate a stronger outlook for activity in the near-term with the projected slowing in growth now not occurring until later in 2005. World demand and export prices are projected to moderate through 2005. Net immigration has slowed appreciably. Housing activity continues to ease, but has been held up at least temporarily by last year's mortgage price war. The pipeline effects from last year's policy tightening will continue to raise average effective mortgage rates through this year but the impact will be gradual. The greater momentum in activity in the near term implies stronger underlying inflation pressures than we expected. The additional tightening today is required to contain these pressures.

"Since we remain of the view that the economy is close to a turning point, we have to carefully confront the possibility that a further tightening in policy at this stage of the cycle might exacerbate an eventual slowing in activity. However, not responding to the prospect of stronger inflation pressures now would create a risk that inflation expectations and wage and price setting behaviour could change in a way that would make the task of containing inflation more difficult in the future, even if growth slows. Being prudent now reduces the prospect of a tighter monetary policy later on.

"Whether there is any further tightening ahead will depend on how the risks play out over the coming period. Certainly, the current outlook offers little scope for an easing of policy in the foreseeable future."

« Not all lenders are playing the price war gameBollard raises rates, leaves the door open for more »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.44 - - -
AIA - Go Home Loans 6.54 4.89 4.95 5.09
ANZ 6.49 5.55 5.55 5.69
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 4.95 4.95 5.09
ASB Bank 6.44 4.89 4.95 5.09
ASB Better Homes Top Up - - - 1.00
Avanti Finance - Near Prime 6.90 - - -
Avanti Finance - Specialised 8.34 - - -
Basecorp Finance ▼7.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 5.99 5.69 5.69
BNZ - Mortgage One 6.54 - - -
BNZ - Rapid Repay 6.54 - - -
BNZ - Std 6.44 4.89 4.95 5.09
BNZ - TotalMoney 6.54 - - -
CFML 321 Loans 4.99 - - -
CFML Home Loans 6.70 - - -
CFML Prime Loans 7.20 - - -
CFML Standard Loans 7.99 - - -
China Construction Bank 6.44 4.85 4.95 4.95
China Construction Bank Special 6.44 5.85 5.95 5.95
Lender Flt 1yr 2yr 3yr
Co-operative Bank - First Home Special - 4.85 - -
Co-operative Bank - Owner Occ 5.95 4.95 4.99 5.25
Co-operative Bank - Standard 5.95 5.45 5.49 5.75
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.29 5.19 -
First Credit Union Standard 6.94 5.79 5.49 -
Heartland Bank - Online 5.99 5.89 - -
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 7.45 5.90 5.80 -
ICBC 6.50 4.85 4.95 5.05
Kainga Ora 6.44 4.89 4.95 5.09
Lender Flt 1yr 2yr 3yr
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.35 5.79 5.85 5.95
Kiwibank - Offset 6.35 - - -
Kiwibank Special - ▲6.29 ▲5.79 ▲5.79
Liberty 6.90 6.80 6.50 6.45
Nelson Building Society 6.94 4.99 4.93 -
Pepper Money Near Prime 6.85 - - -
Pepper Money Prime 6.29 - - -
Pepper Money Specialist 8.30 - - -
SBS Bank 6.49 ▼5.49 5.55 ▼5.69
SBS Bank Special - ▼4.89 4.95 ▼5.09
Lender Flt 1yr 2yr 3yr
SBS Construction lending for FHB 3.94 - - -
SBS FirstHome Combo - 4.29 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 8.64 - - -
TSB Bank 7.19 5.69 5.75 6.09
TSB Special 6.39 4.89 4.95 5.29
Unity First Home Buyer special - 4.29 - -
Unity Special 6.64 4.99 4.99 -
Unity Standard 6.64 5.79 5.79 -
Wairarapa Building Society 6.75 5.09 4.95 -
Westpac 6.59 5.49 5.55 5.59
Lender Flt 1yr 2yr 3yr
Westpac Choices Everyday 6.69 - - -
Westpac Offset 6.59 - - -
Westpac Special - 4.89 4.95 4.99
Median 6.56 5.04 5.09 5.25

Last updated: 10 July 2025 4:59pm

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