How Does the OCR Change Affect Your Borrowing Power?

ASB and Westpac have joined ANZ in lowering their mortgage serviceability test rates, following the Reserve Bank's recent cut in the Official Cash Rate (OCR). This means that banks are now assessing your ability to repay your home loans at slightly lower interest rate thresholds, potentially increasing the amount you can borrow.

• What's happening? The Reserve Bank of New Zealand (RBNZ) reduced the OCR by 25 basis points on Wednesday 9 April, prompting banks to reassess their mortgage serviceability test rates.

  
  

• Who's making changes? Westpac is lowering its rate from 7.25% to 7.00%, and ASB is reducing theirs from 7.30% to 7.10%, both effective April 14th. ANZ had already cut its rate to 7.10% a week prior.

  
  

• Why is this important? A lower test rate means that banks may be willing to lend more to potential homebuyers.

What does this mean for you?

If you're considering buying a home, this could be a good time to reassess your borrowing power. Get in touch and we’ll help you run the numbers and let you know what’s possible.