Bank cuts home loan rates in wake of OCR drop

Thursday, 21 August 2025

The Reserve Bank has cut the Official Cash Rate by 25 basis points, to 3%.

BNZ is the latest bank to cut home loan rates, following the 3% OCR drop on Wednesday.

From Wednesday, August 27, the BNZ’s standard variable rates will go from 6.44% to 6.29%.

The bank’s special rates, TotalMoney Variable Rate, Mortgage One, and Rapid Repay, will all drop from 6.54% to 6.39%.

The changes were announced in a statement on Thursday morning.

The Reserve Bank cut the official cash rate by 25 basis points to 3% on Wednesday, which had been widely forecast

Since the announcement, different banks have made cuts to their rates. ANZ said on Wednesday afternoon it would cut its floating and flexible rates by 20 basis points to 6.29% and 6.40%, roughly.

BNZ is the latest bank to cut home rates by 0.15% following the 3% OCR drop.

About 12% of ANZ's home loans were on floating rates, with the vast majority on fixed rates.

Westpac also said it would introduce a rate of 4.75% on one-year, 18-month, and two-year terms.

And the Reserve Bank lowered its forecast track to indicate a 2.6% OCR through next year.

Infometrics principal economist Nick Brunsdon agreed the 25bp cut had been fully priced into home loan rates in cuts over the past two weeks, and said further immediate cuts were unlikely to follow.

“However, there were broader signals in the Reserve Bank’s announcement which imply further cuts to the OCR - and home loan rates - later this year.”