NZ housing and rates

ANZ OCR Forecast 2027: What It Means for NZ Mortgages

New Zealand mortgage borrowers are facing an unusual combination: interest rates may still have further to rise, while house prices could remain almost flat.

ANZ's latest Property Focus forecasts the Official Cash Rate rising from its current 2.75% to 3.50% by March 2027. At the same time, ANZ expects average New Zealand house prices to finish 2026 about 1% below where they started, followed by only around 2% growth in 2027. Mortgage Professional

For borrowers, the important point isn't whether ANZ gets every forecast exactly right. It's what this combination could mean for affordability, refixing and property decisions.

ANZ expects the OCR to peak at 3.50%

ANZ economists expect the Reserve Bank to increase the OCR by 25 basis points at its October meeting, taking it from 2.75% to 3.00%. Their current forecast then has the RBNZ pausing in December before raising the OCR another 25 basis points in February and again in March. That would produce a peak of 3.50% by March 2027. Mortgage Professional

This is an ANZ forecast. It is not a commitment from the Reserve Bank. The RBNZ will continue assessing inflation, employment, economic activity and other information before making each decision. Forecasts can — and frequently do — change when the economic data changes.

A subdued housing outlook

ANZ's outlook for housing is much less dramatic. It expects average prices to end 2026 around 1% below their level at the start of the year. For 2027, it forecasts approximately 2% growth.

Housing activity is already subdued. ANZ says August's seasonally adjusted sales figure was the weakest since 2024, while the seasonally adjusted REINZ House Price Index has recorded small declines in four of the past five months. Mortgage Professional

In other words, ANZ isn't forecasting another large housing upswing even as the wider economy evolves.

What this could mean for buyers

A slow housing market has some advantages for buyers. When properties take longer to sell and buyers have more choice, there can be greater opportunity to negotiate and complete proper due diligence without the same level of FOMO seen in a booming market.

But purchase price is only half the affordability equation. The other side is the mortgage required to buy it. If mortgage rates rise, repayments can increase and banks' servicing assessments can also become more restrictive. A house being $20,000 cheaper doesn't necessarily improve affordability if financing the mortgage becomes materially more expensive.

First-home buyers should therefore consider both the purchase price and the likely mortgage repayment.

Refixing: test more than one rate scenario

Borrowers coming off a fixed term face a different question. Shorter fixed rates can be attractive because they may be cheaper today and give the borrower another opportunity to refix sooner. But that strategy works best when future rates move favourably. If the interest-rate environment is higher when the loan next expires, the borrower may instead face a larger repayment.

That doesn't mean ANZ's forecast proves everyone should fix for longer. It doesn't. Longer fixed terms can cost more today and reduce flexibility if circumstances change. A more useful approach is to calculate the repayment under several possible future rates before deciding how much interest-rate certainty you need.

Why an OCR forecast is not a fixed-rate forecast

Another important point emerged this week. ANZ actually cut its special 18-month fixed home-loan rate to 5.29% and its 2-year special rate to 5.35%, despite wholesale rates having risen recently. Those special rates apply to eligible borrowers, including relevant equity requirements.

This illustrates an important distinction. The OCR strongly influences floating rates and the broader interest-rate environment, but fixed mortgage rates are also affected by wholesale funding costs, market expectations and competition between banks. So an OCR forecast shouldn't be translated directly into a prediction for a particular fixed mortgage rate.

Competition between banks can create refinancing opportunities even when the broader interest-rate environment isn't especially favourable. But refinancing involves more than finding a lower advertised rate. Borrowers should consider loan structure, break costs where relevant, legal costs, cashback conditions and whether moving lenders actually improves the overall position. A new lender will also conduct its own credit and servicing assessment.

Investors: focus on cash flow

For investors, ANZ's house-price forecast is a useful reminder to separate investment cash flow from expected capital growth. A forecast of around 2% house-price growth in 2027 doesn't provide much room for an investment strategy that depends on rapid appreciation. The property's rent, mortgage repayments, rates, insurance, maintenance and vacancy assumptions therefore deserve careful attention. Investors should also consider what happens to cash flow if the mortgage rate rises.

Plan for scenarios, not predictions

Rather than trying to predict exactly where rates will be next March, consider three scenarios.

• What happens if rates are lower than today?
• What happens if they're approximately unchanged?
• What happens if they're higher?

Calculate what each scenario would do to your mortgage repayment and household cash flow. That approach can be much more useful than trying to select the single "perfect" fixed term.

Talk through your mortgage options

At EasyMortgage, Ravinder Chahal can help borrowers compare lender options and mortgage structures based on their circumstances rather than relying solely on an interest-rate forecast.

Explore refinance and refixing options

Frequently asked questions

Will the OCR definitely reach 3.50%?

No. That's ANZ's current forecast. Future RBNZ decisions will depend on economic data and conditions at the time.

Will mortgage rates rise if the OCR rises?

Not necessarily by the same amount or at the same time. Floating rates are closely influenced by the OCR, while fixed rates are also influenced by wholesale funding costs and bank competition.

Does ANZ expect NZ house prices to fall?

ANZ currently forecasts average house prices to finish 2026 approximately 1% below their level at the start of the year, followed by about 2% growth in 2027. Mortgage Professional

Should I fix my mortgage for longer?

There isn't one correct term for every borrower. Current pricing, future repayment risk, flexibility and your own circumstances all matter.

What to watch next

The next major event is the RBNZ's October OCR decision. Beyond that, inflation, employment data and wholesale interest rates will help determine whether ANZ's 3.50% forecast remains plausible.

For borrowers, the key isn't guessing each decision correctly. It's making sure the mortgage remains manageable across a reasonable range of outcomes.

Sources

ANZ New Zealand — Property Focus — ANZ's official housing research hub.

NZ Adviser — ANZ September Property Focus coverage — published 30 September 2026, reporting ANZ's latest OCR and house-price forecasts.

This article provides general information only and isn't personalised financial advice. Interest-rate forecasts can change, lender criteria vary, and future OCR, mortgage-rate and property-price movements cannot be guaranteed.