Banks pass full OCR hike to floating borrowers; savers get less

ANZ and Westpac have raised floating home-loan rates by a full 25 basis points after the Reserve Bank of New Zealand lifted the Official Cash Rate to 2.75% on 2 September 2026.

ANZ moved its floating home loan from 6.04% to 6.29% and its flexible home loan from 6.15% to 6.40%. New loans take effect from 9 September; existing customers from 23 September. Westpac is lifting variable home and business lending rates by 0.25%, effective Monday for new customers and Thursday for existing ones.

On a $500,000 floating mortgage, 25 basis points equates to about $1,250 a year in extra interest, or roughly $48 a fortnight. On a $600,000 loan the lift is nearer $1,500 a year, or about $58 a fortnight, before amortisation effects.

Pre-move advertised floating rates sat near Kiwibank 6.00%, ANZ and ASB 6.04%, BNZ 6.09% and Westpac 6.14%. A full pass-through leaves Westpac’s Choices Floating near 6.39% if the July template holds.

The pattern matches July’s full +25bp floating pass-through across the five majors after the OCR rose to 2.50%. That contrasts with the incomplete pass-through of many OCR cuts in 2024–25, when interest.co.nz estimated majors withheld 40–50 basis points of cumulative cuts from floating borrowers.

Deposit rates tell a different story. Westpac is lifting Bonus Saver and Business Online Saver by the full 0.25% from Monday. ANZ lifted some call and online accounts by only 0.05% to 0.50%, with Serious Saver premium up 0.25% to 2% (total available 2.05% from 1 October) and the standard Serious Saver unchanged.

The Reserve Bank’s September summary record of meeting noted higher wholesale rates had lifted mortgage and business lending rates, but also a more limited pass-through of higher wholesale rates to term deposit rates, which lowers banks’ new funding costs. Greater deposit pass-through, the Bank said, would better match the desired policy stance.

That asymmetry supports bank net interest margins after an incomplete cut cycle. Floating and revolving borrowers carry the immediate cash-flow hit. Savers see selective, often partial lifts.

Housing credit stock was about $399 billion in May 2026 and crossed $400 billion in June, according to RBNZ sector data and interest.co.nz. New residential mortgage lending in June was still heavily fixed: 81.9% fixed and 18.1% floating, per RBNZ C71. Most households feel little change this week. The hit concentrates on the floating minority, offset-product users, and those rolling off fixed terms.

RBNZ B30 showed the new weighted-average floating residential rate at 5.53% in June 2026, down from 8.30% two years earlier. Carded B3 floating new-customer rates jumped to 6.07% in July after the first hike in this cycle.

Westpac managing director of product, sustainability and marketing Sarah Hearn said most home-loan customers are on fixed rates with no change today. She said bank data suggested households remain well-placed to manage further rises, and invited worried borrowers to seek advice.

New Zealanders have shown resilience in the face of cost pressures and uncertainty, and our data suggests they remain well-placed to manage further rate rises.

Mortgage adviser Campbell Hastie said markets expected the OCR rise and that it would eventually flow into fixed rates. Cotality’s chief property economist argued much of the OCR path is already priced into fixed rates, so near-term fixed moves may be muted, while still seeing a greater likelihood of higher rather than lower mortgage rates over coming months.

The Monetary Policy Committee’s consensus decision took the OCR from 2.50% to 2.75%—the second consecutive 25bp hike after July. That ended a deep easing cycle from a 5.50% peak in August 2024 to a 2.25% trough by November 2025. June quarter CPI hit 4.1% on Middle East conflict-driven fuel prices; ex-fuel inflation was 2.9%, the RBNZ said.

The September MPS OCR track projects a quarterly-average OCR of 2.81% in December 2026 and 3.15% by end-2027. Governor Anna Breman said a further increase was likely but timing highly uncertain.

We do think that it’s likely there may be a future OCR increase, but the timing is highly uncertain.

Next reviews fall on 28 October 2026, just before the election, and 9 December 2026. Bank economists still diverge on the terminal rate. ASB senior economist Mark Smith has pointed toward further hikes to end 2026 at 3.25%. Kiwibank chief economist Jarrod Kerr has favoured one more rise to about 3% then a prolonged pause.

The FMA’s OCR pass-through transparency tables, covering about 98% of housing loans, documented full +25bp floating mortgage changes after the July hike, with existing-customer effective lags of about a week to three weeks. The same full-lending pattern is repeating now.

For floating customers the bill is clear and immediate. For the banks, full lending pass-through and thinner deposit lifts rebuild the spread the cut cycle compressed. October and December will show whether the RBNZ path and peer forecasts keep adding 25bp steps—and whether deposit rates ever catch up to the lending side of the ledger.