Why mortgage rates are rising even though the OCR hasn’t moved?

The Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR) unchanged at 2.25% on the 8th of April 2026, yet we have seen an increase in fixed-term rates offered by the banks.

That is because fixed home loan rates are not based on the OCR alone. Banks also price them using wholesale interest rates, future inflation expectations, and funding costs.

This is where you can get caught out. It is easy to assume that if the OCR stays the same, mortgage rates should too, but the market is forward-looking. Banks are reacting not just to today’s OCR, but to where inflation and interest rates might go next.

For example, an escalation of tension in the Middle East can cause wholesale rates to rise further, as markets begin pricing in the risk of higher inflation. On the other hand, a resolution can see rates ease back down again, all while the OCR itself has not moved.

The key message for you is simple: it is a good idea not to rely on OCR headlines alone. The OCR may be on hold, but the mortgage market is still moving.

What would cause the Reserve Bank to increase the OCR?

If inflation starts to become sticky, and there is evidence that this is flowing through into wage growth and core inflation, then the Reserve Bank would likely take action by lifting the OCR.

The RBNZ has noted that it is the outlook for the medium term that determines the policy response, not a spike in the short term. Core inflation is the part of inflation that tends to be more persistent and widespread, rather than being driven by temporary jumps in things like petrol or grocery prices.

What to consider with your mortgage lending?

It is a good idea to engage an experienced mortgage adviser who will not only consider the current political and economic factors, but also your personal circumstances.

If you want to avoid the risk of interest rates increasing, then locking in certainty could be a suitable option to consider. However, you also need to consider break fees, future plans, and overall flexibility, so it pays to discuss these carefully with your mortgage adviser.

Also, it is worth considering not putting all your eggs in one basket. Spreading your lending across different terms can help reduce risk and provide a more balanced approach in uncertain times.

If you are interested in seeing how these current market shifts specifically impact your monthly repayments, please reach out to our team at Loan Market Compass.