We tracked the floating home loan rate changes over the past two and a half years and find that the main banks have all held back some of the OCR reductions, but are passing on the latest OCR increase in full

The OCR review on July 8, 2026 brought a +25 bps rise. Some analysts were surprised it came then, some not. Financial  markets had it two-thirds priced in. So following, the rest of that change has now been priced in.

This latest rise is the first since March 2023.

Back in early 2023, the OCR was 5.25% and that March 2023 hike took it up to its recent peak of 5.50%. But since then, it has been all downward changes, in fact taking it down to 2.25%, first in November 2025.

The OCR reductions all came after the pandemic inflation surge, and as it became clear that inflation was easing. 

Now of course, inflation is a renewed threat, thanks largely to Trump's Hormuz adventure. Global supply chains are under stress again, and oil prices are trying to navigate supply disruptions. The resulting cost increases are embedding inflationary impulses.

So, from early 2023 until now, the net OCR change has been -275 bps, from 5.25% to 2.5%.

But borrowers with memories will recall that from February 2025 until November 2025 the main banks didn't always pass on all the OCR cuts. Two went further, adding out of cycle increases to their floating rates.

So this is a review of where we have ended, from early 2023 until now. The net result is that all the main banks have held back some of the OCR change on the way down. But for the July 9 increase, they passed it all on.

The net result is that banks have withheld 40 to 50 bps from their floating rate clients of the cumulative RBNZ policy rate cuts.

(We should note that we haven't had the ANZ floating rate change advice yet. But this analysis assumes they will pass on the full +25 bps rise as well.)

The table above tracks how each of the main banks has passed on the OCR change. ANZ, ASB and BNZ have withheld 40 bps. Kiwibank and Westpac have withheld 50 bps over this period.

The habit of withholding some of the decreases started with Westpac in February 2025. Then every main bank adopted the habit in each of the following OCR decreases. ANZ and Kiwibank even chimed in with out-of-cycle rate hikes in 2025 and 2026 even though the RBNZ held pat at their review dates.

But now that rate hikes are on the cards, these same banks are passing on in full, under cover of the RBNZ move.

What can you do about this if it affects you? Change banks. Not necessary to the main banks listed above, but to a challenger bank. However, you should wait until those challenger banks reveal their floating rate changes. But it is likely that the only material rate advantage will be with the Cooperative Bank. So choices will be limited then.

Or you can switch out your floating rate mortgage to either a 6 month or one year fixed rate both of which have lower rates at present.