Interest rates are on the rise again – what’s the current advice?

The Reserve Bank has maintained the Official Cash Rate (OCR) in what it continues to describe as “stimulatory” territory, with the current rate sitting at 2.25% and 2 year mortgage rates around 4.69%. Market analysts note that while this relatively low-rate environment is supporting economic activity through 2026, conditions are expected to gradually tighten by 2027. Forecasts point to the OCR moving back toward a more “neutral” range as inflation pressures ease and growth stabilises. For now, borrowers remain in a favourable position compared with the highs of the previous rate cycle, though a full return to the ultra‑low borrowing costs of earlier years is not anticipated.

General guidance we’re giving clients right now includes:

• Avoid betting everything on rates falling further; current levels are already well off the peaks and are considered closer to sustainable, long‑run settings.

• Consider mixing terms (for example, splitting across 1–3 year fixes) to balance flexibility with certainty, rather than going all‑in on one short or long term.

• Keep stress‑testing your budget at higher rates than you’re actually paying, so you’re prepared if the OCR moves up again.

• If you’re on floating or coming off a high fixed rate, now can be a good time to review your overall structure, not just “roll it over and hope for the best”.

• Take advantage of the rate lock period specific to your bank and lock in rates sooner rather than later.

  
  

As always, the right strategy depends on your income stability, time horizon in the property, and comfort with risk, so personalised advice remains important. Do get in touch to learn more and for specific financial advice for your lending.