The latest drop in the official cash rate will mean more relief for Kiwis’ backpockets, Finance Minister, Nicola Willis said today.
The 50-point drop in the rate is the third drop since August, meaning the rate has fallen 125 basis points in that time.
“That is good news for families and businesses – both directly and indirectly,” Ms Willis says.
“To give one example, a family with a $500,000 mortgage on a 25-year term could expect to be about $180 a fortnight better off than it was a few months ago, if its rate dropped from 7 to 5.75%.
“Of course, the impact will depend on the size of those mortgages and whether they are floating or fixed, as well as what their current rates are.
“The drop means many everyday Kiwis can focus more on what matters most to them, and less on making the next mortgage repayment or whether their card will decline at the supermarket.”
The reduction follows tax relief, which took effect on July 31 this year, and the FamilyBoost childcare payments that many households are now receiving, the Minister said.
“These changes mean large numbers of families are better off than they were a year ago.”
“For businesses, lower rates mean lower borrowing costs and more money in the economy.
“There is a long road ahead, but the steps the Government has taken to carefully prioritise government spending, invest in frontline services, reduce red tape, and restore confidence in the economy are having an impact.
“We are headed in the right direction,” said Minister Willis.
