Lindsey Carroll, Author at Mortgage Suite mortgage brokers Auckland, New Zealand

What’s Going To Happen To Mortgages In 2026?

Posted on February 26, 2026February 26, 2026 by Lindsey Carroll

New year, new direction…

But what direction will mortgage rates take this year? We’ve already had one Reserve Bank decision to keep the OCR the same. What can we expect going forward?

Of course, we can never entirely predict the future, but we can make our best guess based on the information available.

This is what we are expecting for mortgages in 2026.

Official Cash Rate (OCR): Staying At Low Levels… For Now

On 18th February, the Reserve Bank announced that it was keeping the OCR on hold at 2.25%. This continues the easing cycle that they began in 2024 when inflation moved within their target band of 1-3%. Their view is that inflation will likely remain within that band over the next 12 months, so monetary policy will remain accommodative to support economic recovery.

So, where is the OCR going to go?

Many economists are forecasting that the OCR will remain around current levels for much of 2026, but that it may begin to creep up in the second half of the year.

This moves away from earlier expectations that the OCR would continue to fall. It looks like the easing cycle may be nearing its end, and the OCR could move upwards again if inflation takes off again.

Let’s see how that news might impact interest rates…

Mortgages: What Could Happen To Interest Rates?

While the OCR is one of the determining factors for setting interest rates, it is not the only one. Interest rates are also impacted by swap rates, bank funding costs and market expectations.

In 2026, we might see:

Short-Term Rates Staying Low

The stability in the OCR has allowed banks to offer their shoter terms rates at a great rate. 1 to 2-year fixes should remain stable or even dip lower, as long as wholesale funding costs stay low also.

Long-Terms Rates May Creep Up

Many banks price their 3-5 year fixed rates based on market expectations for future OCR moves. So, if the OCR has the potential to rise in the future, these increases will need to be priced into the longer-term rates. We have seen recent evidence of this already; shorter-term rates are competitive, but longer-term special rates have been moving up.

It’s a bit of a mixed bag for what to expect. Some rates are likely to remain competitive, but the longer-term rates could nudge higher if an OCR increase is anticipated.

What To Be Mindful Of This Year

These are the key things to keep in mind in 2026:

Timing Matters — Especially on Fixed Terms
With the potential for rates to shift, how and when you fix your mortgage will matter a lot. If your mortgage is coming off a higher rate, you might be able to take advantage of competitive rates now. Or, you might choose to split portions of your mortgage across different terms to spread your risk.
Banks Are Pricing in Future Policy Moves
Banks often adjust their fixed rates before the RBNZ changes the OCR. They set those rates based on market pricing and funding expectations. That’s why long-term mortgage specials may not seem as good as the short-term ones!
House Prices and the Economy Are Part of the Puzzle
Many economists expect house price growth to remain modest. In turn, that means borrower demand is likely to stay balanced and will not fuel inflationary pressure. If house prices do start to climb again, it could influence monetary policy decisions.
Wholesale Markets, Not Just OCR, Matter
It is not just local conditions that influence our mortgage market. Global pressures can also. International markets, funding costs and swap rates can all push mortgage pricing up or down. Sometimes, this has nothing to do with what the OCR is set at, so don’t rely solely on OCR movement to make decisions about your borrowing.

What Does It All Mean?

➡️ OCR – likely to remain relatively stable, but there is the potential for upward movement later in the year if inflation and the economy continue to strengthen.

➡️ Mortgage rates will be a mixed bag as they will reflect the stable OCR conditions and market expectations. Short-term rates are likely to remain competitive, while longer-term rates may move slightly higher.

➡️ Borrowers need to consider timing and mortgage structure, as the focus should not be on what rates are doing now, but where they might move to in the months ahead.

If you’re thinking about refinancing, refixing, or borrowing in 2026, having expert guidance can make all the difference. Predictions can be useful, but decisions should always be personalised to your situation.

That’s why it is vital to speak with an experienced mortgage adviser to help you decide the right strategy for your home loan this year. I would love to be that adviser. Get in touch with the trusted Mortgage Suite team today and take the first step towards creating a mortgage that works for you.

Why Are Interest Rates Going Up If The OCR Is Going Down?

Posted on December 18, 2025December 18, 2025 by Lindsey Carroll

You wouldn’t be alone if you got a bit of a shock last week when Westpac announced it was putting some of its interest rates up.

After all, didn’t the OCR just go down?

Aren’t those interest rates heading in the wrong direction?

Let’s explore exactly what’s happening in the market and answer the question of why are interest rates going up in the lead-up to Christmas!

The OCR Just Went Down

In its last review of the year, the Reserve Bank announced that it was reducing the OCR by 25 basis points to 2.25%. This was a widely expected cut in the Reserve Bank’s quest to balance the economy.

However, in this November review, one (out of six) of the Monetary Policy Committee members voted to leave the cash rate unchanged. We can likely take this as a sign that we’ve reached the bottom of the current interest rate cycle – the OCR is unlikely to drop much lower.

After the cut was announced, we all paused and eagerly awaited news from the banks that their interest rates would be reduced again. We weren’t disappointed when all of the banks announced a reduction in their floating rates.

The talk in the market centred on providing relief to borrowers in the lead-up to the holiday season. But it was also noted there would be positive indicators that the economy was recovering by the next review on 18th February, so further cuts are unlikely.

So, how did we go from interest rate reductions at the end of November to an increase in rates just a couple of weeks later?

Why Are Interest Rates Going Up?

Westpac kicked things off by increasing its two to five-year terms by 30 basis points on Tuesday 9th December. Their two-year fix rose to 4.75%, and their five-year special rate moved to 5.29%. At the same time, they lowered their six-month rate to 4.69%.

ASB was not far behind, also increasing their long term rates. Soon, the other banks followed. But why?

There are a couple of reasons. Wholesale rates have crept up, so it is currently costing the banks more to borrow money. It was thought that wholesale rates rose in reaction to the Reserve Bank’s commentary.

“Before the latest OCR decision, wholesale markets had virtually priced in one more cut. So when the Reserve Bank indicated it thought another cut might not be needed, wholesale rates ticked up.” [source]

Is it an overreaction? Some economists think so. It has been a very quick reversal in position, going from interest rate cuts to increases in just two weeks. It can also feel confusing that interest rates are going up when the OCR just went down. But as we have mentioned in previous articles, there are many factors that determine what interest rates are set at, the OCR is just one component.

Where Are Rates Going Next?

It is hard to say definitively what will happen to interest rates in the short and long term. It has been reported that banks have some room to absorb wholesale rate increases. The main banks are currently operating at a net interest margin of 2.4% – 2.5%, roughly the same as what they were a year ago.

The fact that the main banks have all made moves to increase their longer-term rates is quite telling. But we will have to keep an eye on what might happen over the holiday period. If people are worried about rates rising again, they may restrict their spending over Christmas. That could force the Reserve Bank to make another cut in its February review.

The key thing to note from all of this is that wholesale rates have stopped falling. Where things go from here is still not set in stone.

What Does It All Mean?

So, what does all of this mean for your average mortgage holder?

Well, the best advice we can give is to seek advice that is tailored to your personal situation. A mortgage advisor will be your best resource to navigate this period of the property market. They can help you build the best mortgage structure based on your current borrowing and future plans.

Economists have been saying for some time that we are nearing the bottom of this interest rate cycle. So, it could be worth considering longer-term mortgage fixes as the long term rates are unlikely to go any lower. In fact, the last week has shown they are likely to go higher.

In saying that, a blanket fix across your entire mortgage is not always the best option. Times are still uncertain and we don’t know what might happen next. It could be a better option to split your mortgage over a couple of different terms so you aren’t exposed to as much risk.

There is also the fact that banks are offering decent cash-back incentives to refinance. So that is another factor to consider if you are a new borrower or it is time to refix your current mortgage.

Basically, we think the best solution is to give us a call so that we can talk through your options. We can help you create a mortgage structure that will work with your budget and circumstances. Reach out to our team today for helpful, friendly and obligation-free advice.

10 Smart Ways To Pay Less Interest On Your Mortgage

Posted on November 30, 2025November 30, 2025 by Lindsey Carroll

No one wants to pay more interest than they have to.

However, most people think in order to pay less interest on your mortgage, you must make big extra repayments or radically change your lifestyle.

The truth is, you can save thousands of dollars in interest costs by simply being strategic with the way your loan is set up and how you manage it over time.

Here are 10 smart ways you can reduce the amount of interest you pay on your mortgage…

10 Smart Ways To Pay Less Interest On Your Mortgage

1: Choose The Right Loan Structure

The structure of your loan will determine how much flexibility you will have to reduce the interest you pay in both the short and long term. Mixing up your fixed terms or even having a split between fixed and floating portions can create opportunities to pay more off the principal without penalty.

The right structure can easily save you tens of thousands over the lifetime of your mortgage.

2: Align Your Loan Terms With Your Future Plans

Many homeowners are guilty of locking in their mortgage terms without really thinking ahead. They look at the rates and lock in based on that. But, if you are planning on renovations, refinancing, or selling within the next few years, setting up shorter fixed terms can save you money on break fees and even give you access to better rates sooner.

Likewise, if you intend to stay put in your property for a while, longer term rates can be attractive for stability, and you can always increase your repayments slightly to bring the interest portion down.

3: Don’t Mortgage Your Fees

It can be very tempting to roll any legal fees, application costs and loan setup charges into your mortgage. But, if you do that, you will be paying interest on those small costs for decades to come, making them much larger costs.

By paying these fees upfront, you can significantly reduce your long-term interest bill.

4: Maximise Your Banking Setup

Offset accounts, revolving credit facilities, and even a well-chosen transaction account can dramatically reduce the interest you pay. The simple act of keeping your income sitting against your mortgage, even if it’s just for a few days before the bills come out, can seriously cut down on interest costs.

5: Kick The High-Interest Debt First

High-interest debt, like credit cards, personal loans or buy-now-pay-later schemes, is guilty of quietly stealing the money you could be putting towards your mortgage. If you are only paying the minimum payment on these debts, you will be incurring lots of interest, often charged upwards of 20%!

Clearing those debts faster frees up your cash so that you can put it against your home loan instead. This will save you interest in both areas!

6: Line Your Repayments Up With Your Income

You don’t need to take whatever date the bank gives you for your repayments. Instead, chat with them about aligning your repayment dates with your income cycle.

That way, if you are using things like an offset account, you can maximise the efficiency of this. With the right set-up, when your salary lands in your account, it will immediately offset your home loan, reducing your loan’s average daily balance and the interest charged.

7: Review Your Mortgage Annually

Many homeowners set up and forget their mortgages, only revisiting them when a fixed term portion is about to expire. A lot can happen in that time – interest rates can move quickly, bank policies can change, and your financial situation could evolve.

A quick annual review with your mortgage adviser can identify whether your mortgage is still competitive, if another bank is offering better incentives, or whether restructuring could save you interest.

8: Consider All The Terms When You Refix

How long you should refix for will always depend on the current market and whether interest rates are tracking up or down. When the market is tracking down, shorter-term fixes can be beneficial to capitalise on savings quicker, but when rates are rising, a longer-term fix could give you consistency in your payments.

You can also consider shortening the overall term of your loan to pay off in 25 years instead of 30. It does not always mean drastically increasing your repayments; your mortgage adviser can help you run the numbers and investigate.

9: Maximise Extra Income

Bonuses, tax refunds, and unexpected cash boosts are brilliant for reducing interest. But the timing and how you apply them to your mortgage matter. Sometimes, putting a lump sum off the principal is the most beneficial.

Or, putting a lump sum against an offset portion can be the best way. It lets you keep access to the funds while still reducing interest. Used well, it’s a flexible and powerful tool. Again, this is something your mortgage adviser can help you decide on.

10: Don’t Be Afraid To Negotiate

There is almost always wiggle room in the rates that a bank will offer you. Banks generally have unpublished rates and discretionary pricing, but many homeowners either don’t know this or simply don’t ask!

A good mortgage adviser will know when these opportunities exist. They can also give advice on when it might be timely to consider switching banks if you can gain a cash-back offer, sharper pricing or genuine savings. With the right analysis, switching banks can be one of the easiest ways to reduce your total interest bill.

Why Tailored Advice Matters More Than Ever

This list highlights just how many different ways there are for reducing mortgage interest, but also why no single strategy works for everyone. Your goals, income, timeframe, and risk tolerance all shape what is “smart” for your situation.

As an experienced adviser, Mortgage Suite looks at more than just your interest rates to find the combination of structure, repayment strategy, and banking setup that genuinely saves you interest.

If you’d like a personalised plan for how to pay less interest without compromising your lifestyle, I’m here to help. Let’s chat about how we can make this happen!