Mortgage rates creeping up

More small upward moves by banks on longer-term mortgages today.

ANZ, National Bank and SBS Bank have raised rates by between 10 and 15 basis points (bps) this morning, following moves by other banks over the past week.

The moves contrast with expectations from some that the Reserve Bank will cut the overnight Official Cash Rate on Thursday by 25 basis points to 2.25 per cent. Most economists expect the RBNZ to hold the rate at 2.5 per cent. However, SBS also lowered its six month mortgage rate by 5 bps to 5.50 per cent.

Long term mortgage rates in New Zealand are rising again because of the rise in international wholesale rates as governments around the world borrow more in efforts to stimulate their economies.

This has raised concerns of inflation kickstarting again in the next couple of years, as shown by the recent rise in 5, 10 and 30 year US Treasury bond rates.

SBS raised its two year mortgage rate by 10 bps to 6.35 per cent; three year by 14 bps to 6.99 per cent; and five year by 15 bps to 8.00 per cent. It does not offer a four year rate.

Despite being owned by the same banking group, the two separate arms of ANZ National made some slightly different changes to the rates.

Both raised their standard 18 month mortgage rates by 10 bps to 5.89 per cent.

National Bank raised its three year rate by 10 bps to 6.95 per cent; four year by 15 bps to 7.55 per cent; and five year by 10 bps to 7.95 per cent.

ANZ raised its three year rate by 14 bps to 6.99 per cent; four year by 10 bps to 7.50 per cent; and five year by 14 bps to 7.99 per cent.

SBS became the second bank in a week to raise its five year mortgage rate back to 8 per cent this year, following ASB on Friday. However, ANZ and BNZ are offering 7.99 per cent; and Kiwibank, TSB and National Bank are offering 7.95 per cent.

Westpac is currently the only major bank to have not raised long term mortgage rates in this latest round of moves, and is still offering a five year mortgage rate at 7.60 per cent. HSBC is also offering 7.40 per cent.

- INTEREST.CO.NZ