OCR Announcement, What does it mean for you?

We should have all heard by now that the Reserve Bank has dropped the official cash rate (OCR) to 0.25%. This isn’t something unique to New Zealand, the US and Australia have also dropped their cash rate.

But Why?
The main priority of the OCR rate drop is to maintain some level of confidence in the economy and maintain some business as usual.

Business owners, big and small, will feel the squeeze having less customers due to the fear of the unknown. There is also the pressure of having staff work remotely. Cash reserves for everyone are quickly diminished.

As an employee who made need time off or reduced hours, this is a time of having reduced living costs, any relief from lowered interest rates is important.

This is likely only the start of assistance the Reserve Bank can , or will, provide, they can also adjust the tax rates and LVR requirements to help home buyers or investors.

Bank packages include a reduction in overdraft rates, 100 per cent asset finance funding at reduced rates, extensions of trade credit, principal repayment holidays and moving to interest only terms on a case by case basis as well as online, 24/7 capability to apply for unsecured lending up to $100K.

So Where Does That Leave The Average Home Owner?
For more tips and information read our article on planning and preparation for a recession

For a review of your mortgage contact Vicky today to discuss your situation

- Vicky Springintveld

Read our article about financial planning here.

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