The OCR is the interest rate that the Reserve Bank sets in order to meet the inflation target specified in the Policy Targets Agreement. This rate is the starting point for all other interest rate setting in the New Zealand market. Changes in the OCR have a flow on effect and cause changes in the borrowing and investment rates offered to the public by financial institutions.
Glossary of terms
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With an Offset Loan you have a seperate account to your mortgage account where you hold any savings or spare cash. You only pay interest on the difference between the two accounts. This is a great option if you have a reasonable amount of savings or access to cash that you can use to offset. Banks will often allow you to link accounts to family members but the linked accounts will usually not earn interest.