Someone asked me the question yesterday. My immediate answer was "I don't know" — I don't even know where to start talking about it.
The news out of the Middle East is a lot to take in, and you're probably wondering what a conflict thousands of kilometres away has to do with your house in Pakuranga or your shop on the North Shore. Fair question. Here's the chain, end to end.
Oil, and the Strait of Hormuz
The short answer is oil. Iran sits next to the Strait of Hormuz, one of the world's most important energy chokepoints. The US Energy Information Administration estimates that oil flows through the strait in 2024 were equivalent to about 20% of global petroleum liquids consumption.
How this hits the Kiwi wallet
You've probably noticed the numbers on your local BP or Z creeping up. When fuel costs rise, everything else gets more expensive to move around — groceries, freight, tradies quoting on a build.
In its April 2026 decision, the Reserve Bank said the Middle East conflict and higher oil prices had materially changed the outlook for inflation and growth. It held the OCR at 2.25% and said the medium term effect would depend on how persistent the cost shock became. That is a more useful frame than assuming oil prices lead automatically to one particular OCR decision.
Geopolitics also makes the stock market nervous. If you see red in your KiwiSaver balance this week, take a breath — market volatility is normal during global shocks.
What the banks are doing
Mortgage rates can move before an OCR announcement because they also reflect wholesale funding costs and market expectations. The Reserve Bank reported in April that two year fixed mortgage rates had risen by around 20 basis points. Individual lender pricing still varies and changes frequently.
So what do you actually do?
Do not make a long fixed term decision from one headline. Compare the repayment certainty of a longer term with the flexibility and repricing risk of a shorter term.
A six month or 12 month term may suit some borrowers, while others will value the certainty of fixing for longer. The suitable term depends on your cash flow, plans, risk tolerance and the rates available when you make the decision.
If your mortgage is up for renewal soon, the wait-and-see game just got more interesting. Whether you're looking at a residential refix or a business loan, we're here to help you filter out the noise and find a strategy that fits your actual life.
Stay safe.
— Fei, Homelend