RBNZ Raises OCR to 2.75% on September 2; ANZ Lifts Mortgage Rates

New Zealand’s Reserve Bank raised the official cash rate to 2.75% on September 2, up 25 basis points from 2.50%. This is the second hike in two months as inflation sits at 4.1%, well above the central bank’s 2% target. ANZ, the country’s largest bank, immediately announced higher mortgage rates, with its floating home loan rate climbing from 6.04% to 6.29% effective September 23. The move signals tighter borrowing costs across the economy.

Why the RBNZ hiked rates again

Inflation reached 4.1% in the June quarter, driven largely by fuel prices tied to Middle East conflict. Excluding motor fuels, inflation fell to 2.9%, within the RBNZ’s 1-3% target band. Governor Anna Breman said gradual removal of stimulus now reduces the risk that larger hikes would be needed later. The Monetary Policy Committee voted unanimously to raise the OCR.

What ANZ is doing to mortgage holders

ANZ’s floating home loan rate rises 25 basis points to 6.29%, while its flexible rate climbs to 6.40%. Changes take effect September 23 for existing customers and September 9 for new loans. The bank also lifted business flexible facility rates by 0.25% to 6.29%. ANZ said it reviews rates based on wholesale cost movements, customer impact, and competitor activity.

Savings rates get a small boost

ANZ increased its online account rate by 0.05% to 0.50% from September 9. Its serious saver premium rate rose 0.25% to 2%, reaching 2.05% total from October 1. The standard serious saver rate remained unchanged. ANZ was the first major bank to announce rate changes after the OCR decision.

What comes next for borrowers

The RBNZ signalled further rate rises are likely but timing is highly uncertain. Governor Breman said the committee will assess the impact of the two recent hikes and monitor new economic data before moving again. The OCR track remains data-dependent, not predetermined. Economists expect other banks will follow ANZ’s lead within days, raising mortgage costs across the market.

Final Thoughts

The RBNZ’s gradual approach signals caution despite inflation pressure. For borrowers, expect mortgage rates to climb further as other banks follow ANZ’s move. Savers see modest gains, but the overall trend favours lenders over depositors.

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