The Reserve Bank has cut the Official Cash Rate (OCR) by 25 basis points from 2.50% to 2.25% as widely expected. This is the bank’s final OCR decision for 2025, with the next review scheduled for February 8, 2026.
Over the past 15 months, the OCR has fallen sharply from 5.50% to 2.25%. The move should ease pressure on mortgage borrowers who may see lower interest costs as re-fixings and new loans take effect.
The OCR is set seven times per year by the Reserve Bank. It determines the interest rate at which commercial banks borrow from the central bank, a foundational rate that influences the interest rates banks offer customers on mortgages, business loans, and savings.
This latest decision is also the last under Acting Governor Christian Hawkesby. Starting in December, Anna Breman, appointed in late September, will become the 14th Governor of the Reserve Bank. While the cut should bring welcome relief for borrowers, savers may see lower returns on savings accounts and term deposits, a common trade-off when the OCR falls.
