The RBNZ lifted the Official Cash Rate (OCR) on 8 July to 2.50%
It's the first move since late 2025, and the start of the upward part of the cycle everyone’s been pricing in for a while now. We’ve responded by increasing our On-Call Account return to 2.25% p.a.
Last cycle, the OCR fell 3.25% top to bottom.
Squirrel’s Term Investment rates only came down 2.25%.
What you can take from this is that we don’t match the OCR like-for-like—we assess market conditions, investor demand, and lending demand before making a decision.
Which is why, right now, we’re sitting on our hands and holding Term Investment and lending rates exactly where they are.
It keeps loan growth strong and means we can meet investor demand through our Term Investments and Managed Funds.
Two more increases could be coming before Christmas
The market’s pricing in two further OCR increases before the end of the year.
If they land, we’d expect to look at lifting investor returns off the back of one or both, though we’ll wait and see how things actually play out before committing to anything.
Two down, eight weeks to go
The two Construction Loan mortgagee sales I flagged last month are now progressing through marketing.
We expect both to clear the portfolio within the next eight weeks or so once they settle.
If a loss does eventuate, that’s exactly what the reserve funds are there for: investors keep earning the returns they expect, with full principal paid.
Beyond that, the wider portfolio’s in good shape.
Reserve funds are healthy, arrears are under control and the market’s sitting in a nicely balanced spot between investor demand and loan supply.
Finally, thank you to everyone who joined our latest investor webinar
The turnout was great, your questions were even better—and if you missed it (or want a rewatch), you can check out the recording here.
Fair warning: there’s a blooper in there the team refused to cut 🫣.
Questions, comments, ideas?
If there’s something we’re doing well, or something we could do better, I’m always keen to hear it. Flick me an email on dave@squirrel.co.nz.
