Reserve Bank and Interest Rates 2025

The story so far

The Reserve Bank cut the official cash rate by 50 basis points to 3.75% in February, and the major banks moved to cut their interest rates.^{19 Feb 2025} It cut again in August, by 25 basis points to 3% after a split vote on the size of the cut, and Prime Minister Christopher Luxon criticised the Reserve Bank for not cutting enough.^{20, 25 Aug 2025} Banks lowered many mortgage rates through the period, and by 1 November some five-year fixed rates were below 5% for the first time since 2021.^{2 Nov 2025}

Latest

In December, Westpac, ANZ, ASB and BNZ raised some longer-term fixed mortgage rates, with Westpac and ANZ citing rising wholesale costs.^{10, 15, 18 Dec 2025} Governor Breman said financial conditions had tightened more than the Reserve Bank intended, and Willis urged borrowers to compare banks.^{10, 15 Dec 2025}

Key moments

1. 19 Feb 2025Official cash rate cut by 50 basis points to 3.75%.
2. 20 Aug 2025Rate cut to 3% after a split vote within the committee.
3. 29 Aug 2025Board chair Neil Quigley resigns with immediate effect.
4. 10 Sep 2025Texts show Treasury warned Willis that Orr was leaving.
5. 24 Sep 2025Dr Anna Breman named as the first woman to lead the Reserve Bank.
6. 8 Oct 2025Official cash rate cut by 50 basis points to 2.5%.
7. 27 Nov 2025Another 25 basis point cut takes the rate to 2.25%.
8. 18 Dec 2025Major banks raise some longer-term fixed rates as wholesale costs rise.

Written from the stories below; each sentence links to its sources.