A third bank has lifted its variable home loan rates in the wake of yesterday’s increase to the official cash rate.
ASB will lift its floating mortgage rate from 4.85 per cent to 5.35 per cent and its orbit rate from 4.95 per cent to 5.45 per cent.
Its move follows ANZ and BNZ who both lifted their variable rates yesterday soon after the Reserve Bank increased the OCR from 1 per cent to 1.5 per cent.
ANZ announced its floating and flexible home loan interest rates would go up 0.5 per cent to 5.54 per cent and 5.65 per cent (per annum) respectively.
While its business floating and business overdraft base rates would also go up 0.5 per cent.
It also announced increases to its fixed mortgage rates of between 20 and 40 basis points.
Ben Kelleher, ANZ managing director for personal banking, yesterday said the OCR was only one of a number of factors, including wholesale interest rates, that determined bank lending rates.
“The global economic response to Covid-19 and geopolitical issues, like the war in Ukraine, are driving inflation to levels not experienced in decades.”
“Alongside the OCR move … we have seen significant increases in wholesale interest rates in recent weeks. This also has an impact on our fixed interest rates for home loans,” Kelleher said.
BNZ said its variable rates would rise to 5.55 per cent for existing and new customers from May 4.
The new variable rates for the ASB come in from April 27 for new loans and May 4 for existing loans.
ASB also increased interest rates on some of its savings accounts.
The maximum interest rates on ASB’s Savings Plus and Headstart deposit accounts will increase from 0.75 per cent to 1.05 per cent.
The Headstart savings rates start from April 27.
Kelvin Davidson, chief property economist at CoreLogic NZ, said the Reserve Bank opted for the “shock factor” of a 50 basis points increase and said short-term fixed mortgage rates could travel above 6 per cent as a result.
“For the housing market, the implications are clear – even though mortgage rates have already been rising again in recent weeks, this process isn’t over yet. Many ‘special’ fixed-rate mortgages in the popular 1-2 year terms are currently in the range of 4-5 per cent, and it seems fair to suggest that this could end up in the range of 5-6 per cent over the coming months, perhaps a bit above.”
Davidson said that although many borrowers were still sitting on their lower rates agreed last year or earlier, about 50 per cent of existing loans in New Zealand were up for renewal over the next 12 months, with a sharp repayment rise looming.
Source: Read Full Article