Interest rates keep climbing as more banks lift to 8pc

Three more banks raised longer term mortgage rates over the last three days, following increases by ASB last week that saw it become the first bank in New Zealand to raise its five year mortgage rate back to 8% this year.

Longer term mortgage rates in New Zealand have started to rise again as international wholesale rates rise due to concerns of heavy government borrowing by the likes of the US and UK as they print money to buy back government bonds.

On Friday afternoon, BNZ raised all of its standard mortgage rates one year and over by between 20 and 49 basis points (bps). Notable moves were the one year rate, up 20 bps to 5.99% while other banks are still offering one year rates around the 5.50% mark; and the five year rate, up 49 bps to 7.99%. BNZ also raised its seven year rate by 31 bps to 8.60%.

BNZ also introduced a new 'Classic' home loan offer, dropping its 5.49% one year offer and replacing it with an 18 month rate of 5.99%. However the new 18 month rate is still currently trumped by offers from other banks, including 5.79% from ANZ National.

Despite the rise in long term rates, BNZ dropped its Total Money variable mortgage rate by 26 bps to 5.99% to match Kiwibank.

TSB was next to move on Saturday, dropping its six month rate but raising three, four and five year mortgage rates.

The two notable moves were its six month rate, down 14 bps to 5.50%; and five year rate, up 35 bps to 7.95%.

On Monday morning Kiwibank followed TSB's footsteps, raising its five year rate by 35 bps to 7.95%.


INTEREST.CO.NZ