What’s New: The Latest OCR Cut (October 2025)

OCR cut: what it means if you’re buying your first home

The Reserve Bank dropped the Official Cash Rate (OCR) this week by 50 basis points, bringing it down to 2.5 % – a bigger move than most were expecting.

In plain terms? It just got a little cheaper to borrow money.

Banks have already started to follow suit. ANZ was first out of the gates, trimming floating rates by around 0.4 %, and others like BNZ and Kiwibank quickly followed. It’s the first real sign in a while that interest rates are easing –and for first home buyers, that’s worth paying attention to.

So, what does this mean for you?

1. Your repayments could get lighter

Lower interest rates generally mean lower repayments. Even a small drop can take a noticeable chunk off your monthly total – and that makes it easier to plan, save, and breathe a bit easier once you’re in your home.

If you’ve been running the numbers and things felt a bit too tight, it could be time to revisit your pre-approval or talk to your lender again.

2. You might be able to borrow a bit more

Banks use “stress tests” when assessing home loans – basically checking you can still afford repayments if rates were higher. When overall rates drop, those tests can ease slightly, which sometimes means your borrowing power goes up a little.

It’s not a game-changer, but it can make the difference between almost there and ready to go. If you have been denied for lending in the past, it's worth revisiting with your bank or mortgage broker.

3. The fixed vs floating question is back

If rates are heading down, some buyers start looking at shorter-term fixed loans or even floating rates so they can take advantage of future drops.

There’s no one-size-fits-all answer – it depends on your comfort with risk and how long you plan to stay in your home – but it’s a good conversation to have with your broker or bank.

4. More buyers could come off the sidelines

When borrowing gets cheaper, more people jump back into the market. That can mean more competition, especially in popular areas like central Lower Hutt and Waterloo.

The key? Be prepared. Have your pre-approval sorted, know your numbers, and keep an eye out for well-priced new builds like ours at Faisandier.

5. It’s a good time to make a move – but stay smart

This rate cut doesn’t mean we’re heading back to ultra-cheap money overnight. It might take a few months before fixed rates shift meaningfully, and prices could start to rise again as demand builds.

So if you’ve been sitting on the fence, now could be a good time to act while the balance is still in your favour.

Where Faisandier fits in

At Faisandier, we’ve seen firsthand how rate changes can open doors for first home buyers. Our homes are fixed-price, freehold (in most cases), and designed to give you certainty right from the start – no bidding wars, no surprises.

When the market moves, you want a partner who helps you make sense of it – not add more stress. That’s why our team stays across changes like this and keeps you informed every step of the way, from pre-approval to handover.

If you’ve been thinking about your first home, now’s the perfect time to come for a chat or book a visit to one of our show homes. We’ll help you figure out what this OCR change could mean for your next step.