Mortgage forecast for 2026: What’s next for Kiwi borrowers?

Digby’s key takeaways:

• OCR likely to hold at 2.25% through 2026, but inflation could bring rate hikes forward
• Fixed rates remain attractive – consider locking in longer for certainty
• If your repayments drop, use the breathing room to pay down debt faster
• Cashback and refinance deals still available for loans over $400k
• The housing market is set for a strong first half, but may cool later in the year

2025 brought welcome relief for Kiwi borrowers, with rates softening and stability returning. But in 2026, the mood is shifting.

The Official Cash Rate (OCR) is currently sitting at 2.25%. Most economists expect it to stay there for the majority of the year. However, with inflation running hotter than forecast (CPI, 23 Jan 2026), many are now predicting rate hikes to arrive sooner than originally expected – possibly by early 2027, if not before.

This year will be all about watching for signs that the Reserve Bank is ready to move.

Note: Bank OCR forecasts are highly responsive to shifts in inflation data and can change quickly as new economic information emerges.

What does this mean for borrowers?

2026 offers an opportunity to be proactive with your mortgage strategy. With rates holding for now, smart structuring can help you stay ahead if the tide turns.

Digby’s advice

Take a strategic approach to refixing
Longer-term rates may offer greater certainty if increases are ahead

If your repayments drop, keep them the same
This helps reduce the life of your loan and the interest paid

Consider splitting your loan
A mix of fixed terms can help manage interest-rate risk while giving you more flexibility as the market shifts. It’s a smart way to balance certainty now with options later.

Explore cashback and refinancing incentives
Many lenders are still offering cash back incentives of up to 1% for new loans and refinances, subject to meeting minimum lending criteria.

For example:
A $500,000 loan could mean up to $5,000 cash back when refinancing.

We’re seeing clients use these cash backs to offset break fees, making it easier to switch to more competitive rates or lock in longer fixed terms while conditions are still changing.

The property market: what to expect

The housing market is expected to perform well in the first half of 2026, fuelled by economic growth and stronger lending activity. But the second half may slow, as election uncertainty and potential rate rises start to affect buyer confidence.

Why the market could cool:

• General election could lead to a “wait and see” approach from buyers
• Potential policy shifts (housing, tax, interest deductibility) may influence sentiment
• Rate increases may impact affordability, especially for first-home buyers
• Nationwide price growth of 3–5% is expected, though results will vary by region.

Source: https://www.rbnz.govt.nz/statistics/series/lending-and-monetary/new-residential-mortgage-lending-by-purpose

Planning for the year ahead

• Review and refresh your loan structure with an Enva mortgage adviser
• Make the most of Enva’s first home buyer’s hub and support series
• Stay connected with your mortgage adviser and accountant to keep your loan structure and tax planning working in harmony.

Let’s make 2026 work for you

Uncertain about fixing, floating or refinancing? Let’s talk it through – our mortgage advisers are here to help!

Chat with an Enva adviser today! Email us at mortgages@enva.co.nz or give us a call on 0508 287 672

Disclaimer: This blog is for general information only and does not constitute personal financial advice. Always speak to a qualified financial adviser before making decisions related to your mortgage.