February OCR Cut: What it means for Property Investors

The Reserve Bank of New Zealand (RBNZ) announced a 50 basis point cut to the Official Cash Rate (OCR) today—a move that surprised no one.

However, the real buzz began when the accompanying statement was released, prompting a scramble to analyse the key data in the 58-page document.

One standout takeaway? Today's prediction (pink line) shows the OCR is dropping faster than the RBNZ predicted in November (blue line).

What’s next for interest rates?

Today’s RBNZ Monetary Policy Statement suggests:

✔️ 25 basis point cuts in both April and May

✔️ Another cut further down the line, and that’s it

For property investors, this is great news—especially if you have floating rate loans or fixed-term loans rolling over soon.

Lower borrowing costs improve cash flow and create opportunities to reassess financing strategies and future purchases or development projects.

Fixed rates are already dropping

Banks have wasted no time responding, with fixed mortgage rates already moving downward—particularly on shorter-term rates (6-month and 1-year), which are the most sensitive to OCR changes.

If you’re considering fixing for a longer period (2–5 years), it’s worth noting that these rates are influenced more by global economic factors. Right now, Trump’s foreign and economic policies, particularly around tariffs, are shaping international interest rate trends, adding an element of uncertainty to longer-term fixes.

My take: Fix for 1-year

While everyone’s situation is different, my personal opinion is to fix for 1 year.

Rates have come a long way lower, in a short time – the 1 year rate is a full 1% lower than it was just 6 months ago and I don’t want to waste money paying the floating rate while I cross my fingers for lower fixed rates in the future.

Now is the time to review your loan structures and speak with your mortgage advisor. With rates on the move, a proactive approach can make a real difference to your bottom line.

Oliver Pearson

Manager and Property Investor for 20+ years

Oliver Pearson

Manager and Property Investor for 20+ years

Oliver Pearson began investing in property aged 21 and has since bought, developed and sold real estate in the UK, USA, South East Asia and New Zealand. After a career in banking he is now on the management team at Waikato Real Estate and has contributed to property articles for NZ Herald, Stuff and Property Investor Magazine.

Based in Raglan, Oliver's passions extend beyond property to surfing, hydrofoiling, and providing a taxi service for his children.