OCR Cuts: What It Means for Your Mortgage Strategy

The Reserve Bank’s recent cuts to the Official Cash Rate (OCR) have been welcomed by property owners and investors alike. After years of elevated borrowing costs, lower rates can ease the pressure on households while opening fresh opportunities for those looking to expand their portfolios.

What the OCR means for you
The OCR directly influences wholesale interest rates, which in turn impact mortgage rates offered by the banks. A cut doesn’t immediately guarantee cheaper mortgages, but it does set the tone for lower borrowing costs across the market. As lenders sharpen their fixed-term offers and make credit conditions more attractive, more buyers enter the market, which will help reduce the high volume of stock currently available.

Time to review your mortgage
With rates shifting often just before or after every OCR announcement, if you haven’t done so already, this is the ideal time to review how your mortgage is structured.

• Fixed vs floating: If you’ve been sitting on floating rates, locking in a fixed term now could offer stability at more affordable levels.
• Refix decisions: Those coming off higher fixed rates may be able to secure significant savings compared to 12–18 months ago.
• Interest-only strategies: Investors may consider interest-only periods to improve cashflow, particularly with strong rental demand still underpinning yields.

Strategic opportunities for investors
For property investors, OCR cuts can do more than reduce repayments. They can also:

• Unlock borrowing capacity, allowing you to access equity for your next purchase.
• Strengthen your cashflow position, making your investments more resilient.
• Increase competition in the market as more buyers re-enter, creating a potential window to act before prices start climbing again.

Our view
While falling rates are positive, every situation is different. Your goals, risk profile, and portfolio structure should shape your next move. What works for one investor may not work for another.

If you’d like to discuss how OCR cuts could impact your mortgage, and your wider investment strategy, our team is here to help. Get in touch with Wendy and get your mortgage in top shape today.