More banks move to increase interest rates

Three banks have hiked mortgage rates since new inflation data came out on Tuesday. Photo / NZME

Two more banks bumped up their mortgage rates today again in more bad news for borrowers while there are some positive signs for savers with one bank offering 5 per cent interest - the highest rate in some time.

Kiwibank and Westpac joined ANZ in lifting mortgage rates today. Kiwibank increased its six-month to five-year rates by between 40 and 50 basis points.

Its one-year fixed special rate (for those with at least 20 per cent equity) is now 5.89 per cent, up from 5.39 per cent while its two-year rate is now 6.15 per cent, up from 5.65 per cent.

Those with a low deposit/low equity will pay even more with all rates fixed for two years or more now above 7 per cent at Kiwibank. The two-year rate is 7.15 per cent, up from 6.65 per cent.

Westpac increased its rates by between 44 and 54 basis points. Its one-year home loan special is now 5.99 per cent while its two-year fixed home loan special is 6.19 per cent.

Its standard rates remain below 7 per cent for now, with the one-year rate at 6.59 per cent and the two-year at 6.79 per cent.

ANZ increased its rates on Thursday citing Tuesday's inflation figures as well as ongoing volatility in global markets and a significant increase in wholesale market rates.

Annual inflation came in at 7.2 per cent for the year to September 30, much higher than the 6.5 per cent economists had expected and the 6.4 per cent forecast by the Reserve Bank.

That prompted banks to lift their expectations on where the cash rate will now have to rise to in order to bring inflation back down, resulting in higher mortgage rates.

Banks have also lifted deposit rates and today TSB said it would pay 5 per cent for a five-year term deposit - the highest current rate for that term.

TSB GM product and marketing Joe Bishop said with interest rates rising across the board, it wanted to give its customers options and incentives to grow their savings and have a sense of security with their financial goals.

"As a 100 per cent Kiwi-owned bank we put our customers first, we're proud to offer the most competitive rate among banks in the market.

"We have a range of other competitive term deposit rates, giving our customers flexibility to choose what works best for them."

TSB had also recommitted to beating any fixed home loan rate nationally advertised by ANZ, ASB, BNZ and Westpac, Bishop said.

ANZ lifted its rates Thursday with rises of between 15 and 75 basis points although most only rose 25 basis points - substantially less than mortgage rate rises. Its five-year rate only rose 15 basis points to 4.55 per cent.

Westpac only increased its deposit rates by between 10 and 20 basis points. Its five-year rate rose 20 basis points to 4.7 per cent.

While Kiwibank's rates rose between 5 and 35 basis points. It didn't advertise a five-year rate but increased its four-year rate by 5 basis points to 4.35 per cent.