OCR vs the rate at the bank: why they aren't the same number.

The OCR and the rate that lands in front of an investor at the bank are not the same number. They do not always move together, and they do not always move at the same speed.

The OCR is the wholesale rate the RBNZ sets at each Monetary Policy Statement. The mortgage rate is what banks publish on their site once funding cost, retail margin, and risk pricing are stacked on top. Wholesale and retail are linked but loose.

When the wholesale rate drops, retail rates usually follow — but with a lag, and not always one-for-one. The same is true on the way up.

For an investor running a cashflow test, this matters because a verdict run against the OCR is testing the wrong number. The right input is the rate the investor would actually be offered.

The verdict tool defaults to the RBNZ B6 series — the weighted-average rate across all new residential mortgage commitments — because that figure better reflects what the market is actually paying than any single bank's carded headline.

Sources: RBNZ Monetary Policy Statement (OCR), RBNZ B6 series (mortgage rate). Both are linked from the result page with their asOf date.

The takeaway: model your purchase against the rate you would actually pay, not the OCR. The gap between the two is the part of the story most investors miss.