Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
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9:32
OCR. Three letters that can make New Zealand homeowners panic, argue, and refix too fast. We slow it all down and explain why the Reserve Bank is widely expected to leave the Official Cash Rate unchanged at the next review even while inflation fears flare up again. The key point is simple: if oil prices are the main driver, pushing the OCR higher won’t magically make petrol cheaper. It can, however, squeeze households and stall the economy, which is why a “wait and see” approach can be rational.
Then we get into what you’re actually seeing in the market: banks shifting fixed mortgage rates even when the OCR stays put. We talk about how lenders price terms differently, why specials can vanish overnight, and what to consider if you’re hovering on a floating rate. We also zoom out to affordability in places like Wellington and Kāpiti, where prices are well off their peaks, and why that context matters when you’re weighing up risk.
One of the most pointed parts of the chat tackles a question we’re hearing more often as commuting costs rise: should someone quit their job because petrol is expensive and go on a benefit instead? We explain why that move can backfire, how it can limit your future options, and how it can affect mortgage applications and borrowing power. The thread that ties everything together is control what you can control: your budget, your time horizon, and your goals, whether that’s selling soon, moving overseas, or planning a family and needing stability.
If you want help choosing a fixed term that fits your life and not the headlines, reach out. Subscribe, share this with a mate who’s refixing, and leave a review so more Kiwis can make calmer money decisions.
rate is about to be reviewed, I believe, end of this month.
SPEAKER_00
Yep.
SPEAKER_01
And I read ANZ report.
SPEAKER_00
Yep.
SPEAKER_01
And it said that they think it's not going to change. What are your thoughts?
SPEAKER_00
I I I totally agree with that based on the commentary that I'm hearing from various economists. That it's we've got a situation where if they were to put in interest rates up, it would just kill the economy. The OCR up. It would just kill the economy. And you know, they're not going to want to do that. Or the oil putting the OCR up is not going to bring oil prices down. Do you know what I mean? Because they're worried about inflation.
SPEAKER_01
I was about to say inflation is on the rise.
SPEAKER_00
Yep. Inflation is potentially on the rise with the with with oil prices going up. But by using the OCR to put up interest rates, it's not gonna it's not gonna do anything to bring the oil price down. So there's it's it's kind of a thing they don't have any control over.
SPEAKER_01
I believe Anna Brennan came out and said, look, it's just gonna be a short-term pain. We're not gonna have any jerk reaction to it. We're just gonna keep OCR down, we're just gonna try to persevere. Yep. It should blow over, it should be fine. Yep. But the banks are still rising interest rates. They are they're all over the shop, eh?
SPEAKER_00
Because I I thought I saw ASB lower this.
SPEAKER_01
Yeah, well, I think this morning something popped up that they dropped the 18
months one. Yeah, but all the other ones are still higher. So at one point we got below 5% for the three-year rate. Yep. And I remember saying to people, the moment it's below 5% for three-year rate, just fix it.
SPEAKER_00
We got a good one, I got c some c clients, a good three-year one. They just got it just in time before Westpac put theirs up. Yeah. And we had to actually, you know, we had to do the prove, yeah, we had to prove it that we did it on time. Yeah. Because they weren't really gonna go for it.
SPEAKER_01
But yeah, so you know, now it's sort of lingering around 5.19, 5.2. So I guess the real issue is for New Zealanders trying to understand how it's all linked together. And you point it out right. Raising OCR is not gonna help us elevate oil prices.
SPEAKER_00
Yeah.
SPEAKER_01
They're not really fully connected in this instance here.
SPEAKER_00
Yeah, well, that's coming from overseas. The oil price is is being is being driven by something overseas, you know, the conflict in Ira, you know, in
that uh between Iran and America and so forth. So, and and that's causing inflation back here because of oil prices. And that's slowly gonna, if this carries on, it's slowly gonna transfer into food prices and stuff like that, because oil is petrol is used to drive products around. Yeah, it makes it more expensive to get the the the groceries to the the various places. So, but that's a more of a medium to long term impact. So I de at the moment it it's really just the oil prices that are that are that are causing the inflation.
SPEAKER_01
What are your thoughts on people that are thinking of quitting job because they think that driving to work is more expensive and then therefore, you know,
if they quit a job and go and benefit, they might save more money?
SPEAKER_00
My initial reaction is that is a really stupid thing to do because this could be a short-term thing. Yeah. This could be a short-term problem. Why would you give up your work? The w the what the one means of getting you ahead in your life for your future or your family's future to go on a benefit.
SPEAKER_01
But you'd be surprised how many people are out there contemplating this idea, you know? And when you actually put the numbers together, you don't get much on a benefit. And I know the government announced that they will give you $50 extra to help out those law-earning families. But again, like that $50, is it gonna make much difference?
SPEAKER_00
It's a very short-term thing. I mean, perhaps look for a different job that's closer might be a better alternative. I mean, you just you can't this is the way I think about it. You can't think if you go on to a benefit, you you're limited as to what you're gonna be able to do. You you know, and and sort of the benefits don't go up in value a lot, you know, how much you get paid, and you're relying on somebody else to provide for you. That's okay for a short amount of time, but I just don't really get that kind of thinking. I mean, people can do it, I guess, but I wouldn't be really very happy if I uh if I had clients that were doing that. Yeah. I'd be really strongly against it.
SPEAKER_01
But it also affects their mortgage applications, we can't help them as much. I mean, I do have a couple of clients at the moment on benefit that are that have got across the line, but again, they had much high deposits and they were only borrowing you know 300k, 350k. So it wasn't like they were borrowing a million dollar house. I guess with the OCR this month, we'll just wait and see what's gonna happen. It's not gonna change. Hopefully, the banks will come down a bit and not give in to the whole stress of oh my god, the world is ending,
and we're just gonna carry on as normal. But again, guys, just remember 18 months ago we were sitting at six and a half percent interest rates. Yep. You know, we're sitting at five now. Yeah, like it's we're still better off than what we were, and the house prices are much down as well.
SPEAKER_00
Affordability is the best it's been for a long, long time, especially if you're in our our region, Wellington Capity. You know, prices are all 30% of their peaks. So that's you know, from during COVID. So look, we get uh if people we get stuck in the short terminism.
What's going on? We've got a what do we call it? There's a bias about a relative it's called like a relativity bias or something like that. I can't remember the exact word. But you you get so caught up in what's happening now. You know, you don't see what's going what's happened historically or what's happen happened in the future. You're just in the now, and this is all you can think about. But you know, these things do come and go. Take a long-term perspective on what you're doing, medium to long-term perspective. What is it that you want to achieve? And then, you know, the OCR, I don't think that's gonna be moving anywhere for a while. I I really don't, but but will we watch the banks because the banks try to sort of outmaneuver the re the reserve bank if they s think that the OCR is gonna get moved up, you know.
SPEAKER_01
Sometimes they react a bit too soon.
SPEAKER_00
Yeah, yeah, that's right.
SPEAKER_01
But then we do see the reaction afterwards. So if you are hanging out on your floating rates and you know, wondering what what to do, just reach out to us. We should be able to talk about what's relevant to you, regardless of what's going on in the world.
We need to talk about what are your goals, yeah, what are your aspirations. You may want to sell a house in six months' time. So, you know, worrying about three-year rate is none none of the concern for you. Because if you're gonna sell the house and move to Australia, who cares? But if you are planning to have a baby and go off work for the next five years, you know, maybe then the five-year rate is a good option for you, which is still in a good spot, like 5.5, I think, for a five-year rate. So, you know, what you can think about is OCR will happen, it will come and go, it happens six times a year. You know, things happen around it, the banks move rates, etc., etc. But what do you need to do for your particular situation? That's what I always come back to.
SPEAKER_00
Yep, your goal, and that really helps if we know what your goals are, because then we can really help you. And don't get caught up in the the headlines that you see every day in the news. Yeah, it's that's just you know, we we look we work behind the scenes, so you see those headlines all the time. It's always dramatic. Dramatic?
SPEAKER_01
Dramatic. Not traumatic, not traumatic. Well, could be traumatic as well.
SPEAKER_00
Um, but you know, talk to us because we've seen all that stuff, right? Exactly. And plus, there are some lenders with some really good cashbacks as well.
SPEAKER_01
I was about to say, my gosh, one of the lenders came out and they did similar to what ANZ did before Christmas, but they're offering 1.25% cash back for eligible customers. So we're not gonna tell you who it is, we're gonna keep it a secret because we want you to call us. Absolutely. So call us if you heard this. 1.25% cashback for the eligible clients. If you think you're eligible, give us a call. But you don't know if you're eligible if you don't call us.
It's a bit of a trap there. But also tell your friends, tell your friends. And we love when we get referrals, we love it. It's so much more fun when we answer the phone and someone says, Oh, someone referred you to us. Yeah, makes us so happy. Like, think about yourself and your business. You know, if someone refers you someone, it's just so much easier to talk to that person.
SPEAKER_00
We do the little dance, don't we? Little jig.
SPEAKER_01
We do, we do, not together, individually. So, you know, to summarize this conversation really is OCR will be reviewed at the end of this month. The news is basically it it
shouldn't change. The rates hopefully will stay the same as the banks, maybe go back down again. And we just need to control what we can control. Yep. Done.
