Westpac will increase its interest rates from tomorrow. Photo / David Crosling.
Westpac will increase its interest rates from tomorrow. Photo / David Crosling.
Westpac will follow ANZ in increasing its home loan interest rates with hikes of between 40 and 64 basis points from tomorrow.
ANZ was the first major bank to lift its rates today in the wake of the Reserve Bank’s move last Wednesday to increase the official cash rate by 75 basis points to 4.25 per cent.
Westpac’s floating and offset rate will rise 64 basis points to 7.99 per cent.
Its standard fixed term mortgage rates will rise by 40 to 50 basis points with the one year rate set to rise to 7.09 per cent and the two year rate to 7.29 per cent.
Like ANZ, all of Westpac’s standard fixed term rates will rise to over 7 per cent.
While its special rates remain under 7 per cent borrowers have to have a minimum of 20 per cent equity or deposit to access those. The special fixed term one year rate will rise to 6.49 per cent and the two year rate to 6.69 per cent.
Westpac will also increase its saving and term deposit rates. Its one year term deposit rate will rise 60 basis points to 5.1 per cent.
It will pass on the full 75 basis points to some savers with interest rising on its notice saver account rising to 3.6 per cent and its bonus saver/PIE (portfolio investment entities) fund rising to 3.35 per cent.
Earlier this month Westpac chief executive Catherine McGrath told the Herald about 50,000 Westpac New Zealand home loan customers would come off a fixed term rate of less than 4 per cent and move onto a higher rate in the next six months.
But she was confident the bank had plans in place to support them.
It had changed its outreach approach for customers rolling off a fixed rate.
“We are getting in touch with them earlier, so that’s at 75 days before that interest rate is likely to go up. We also let them rate lock from 60 days,” McGrath added.
“We are working with customers to help them think through what they can do to make sure they are resilient as their borrowing costs go up.”
On top of that it will zero in on around 1000 customers a month who had very large increases, she said.
“We will be contacting them in person and giving them a call to see what we can do again to make sure we can help.”
