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Major banks are increasing mortgage rates here and across the Tasman as it emerges they have an A$850 million direct exposure to stricken US home lender Countrywide.
The banks say the increases are driven by rising rates on wholesale money markets.
Interest.co.nz publisher David Chaston says there is no evidence that the increases are justified by current wholesale market rates.
Rising mortgage interest rates here and in Australia may be driven partly by the Australian banking sector's previously undisclosed direct exposure to the US credit crisis, rather than by the effect the debacle is having on wholesale money markets.
Following a similar move by its Australian parent, New Zealand's largest bank, ANZ National, has raised its key two-year fixed mortgage rate 20 points to 9.6 per cent, citing the increasing cost of wholesale funding because of the effect of the credit crisis.
Westpac said it would follow suit today and the other major banks are expected to do the same.
However David Chaston, publisher of website Interest.co.nz, said: "There's no evidence in the medium- or long-term swap rates that there's cost pressure here driving this.
"You wouldn't say there was reasons at the moment to be raising rates based on wholesale cost pressure."
The big Australian banks and their New Zealand subsidiaries have downplayed their direct exposure to the US sub-prime market as the debacle there unfolded.
But it yesterday emerged that ASB Bank's owner Commonwealth Bank of Australia, BNZ parent National Australia Bank, the ANZ and Westpac had a combined A$850 million exposure to stricken US mortgage lender Countrywide Financial.
Fears that Countrywide is on the brink of collapse have been a significant negative factor on US and global equity markets since the year began.
Chaston said it was likely ANZ National's trend setting increase was a result of "instructions from across the Ditch as opposed to being motivated by costs here".
Westpac spokesman Craig Dowling said: "The key thing here is volatility over an extended period prompted by the global liquidity issues - not the swap rate at any given time."
Chaston said Westpac and ANZ's other rivals were likely relishing the market leader's trend setting increase as an opportunity to rebuild the margin they earn on mortgages which had been squeezed hard during the years of intense competition that occurred during the recent property boom.
ANZ's 20 basis point increase in Australia where most mortgages are on floating rates is double that of most rivals, and has been criticised by Treasurer Wayne Swan as "excessive".
"Banks need to fully explain any increases flowing from the US sub-prime crisis," he said.
The credit crisis which blew up last year on the back of huge losses sustained on sub prime or risky home loans extended to American borrowers has seen banks increasingly reluctant to lend to each other and charging more when they do so.
The lack of liquidity in global credit markets claimed UK bank Northern Rock late last year and central banks around the world have pumped huge amounts of cash into markets in order to get them moving again.
The Australian banks' exposure to Countrywide was through their part in a worldwide syndicate of banks that advanced US$11.5 billion to the embattled lender last year.
The CBA and the NAB invested A$300 million each, ANZ contributed A$150 million and Westpac A$100 million.
It is understood that the Australian banks' investment is partially protected but they would still likely sustain major losses if Countrywide did collapse.
Countrywide, the largest US mortgage lender, said yesterday that foreclosures and late payments rose in December to the highest on record, sending its shares tumbling to their lowest in nearly 13 years.
Countrywide shares had fallen 27.4 per cent on Tuesday.
"Virtually no one in the market is willing to cast a vote of confidence in this company's ability to extricate itself from its current heap of trouble," options analyst Rebecca Engmann Darst said.
Westpac's Dowling said there was "absolutely no link between rate rises in New Zealand and reports from Australia of banks there having some sort of link to Countrywide".
"It formed absolutely no part of the discussion in this market."
- Additional reporting agencies
