Mortgage, deposit rates moving up

AUCKLAND: ANZ and Kiwibank have both lifted mortgage and deposit rates in the wake of last week’s big OCR hike.

Kiwibank was the first to move yesterday morning, lifting its headline rate for a twoyear fixed mortgage to 5.19% per annum (with a minimum 20% equity).

It moved its top deposit rate to 3.15% for a minimum of $10,000 and oneyear term.

‘‘While we are first to move on this occasion, we aim to remain competitive in the market so both our lending and savings customers are getting a fair deal,’’ Kiwibank senior manager savings and borrowing Richie McLay said.

‘‘We know the low interest rate environment has been challenging for some customers who rely on returns from savings. The higher term deposit rates on offer provide a lower risk option for steady returns.’’

ANZ highlighted changes to its floating interest rate and flexible Home Loan interest rate, which will go up 0.4 points to 5.94% per annum and 6.05% per annum respectively.

Business floating and business overdraft base rates would also go up 0.5% per annum, ANZ said.

For Serious Saver, ANZ’s largest savings product, the total interest rate will increase 0.4 points to 1.5%.

Last week the Reserve Bank hiked the official cash rate by 50 basis points to 2%.

The move was largely expected but the commentary and forecasts released by the RBNZ suggested the OCR would rise faster and to a higher level as it sought to head off inflation.

Latest RBNZ forecasts now see the OCR peaking at 3.95% in 2023. That saw wholesale markets pricing in higher rates.

ANZ managing director for personal banking Ben Kelleher said the global economic response to Covid19 and geopolitical issues such as the war in Ukraine were driving inflation to levels not experienced in decades.

‘‘With this in mind, it’s understandable that the Reserve Bank is strongly hiking the OCR in an attempt to dampen inflation,’’ Mr Kelleher said.

While the Reserve Bank acknowledged that raising the OCR steeply put pressure on some households’ spending decisions, on average household balance sheets were healthy and it was confident the economy could withstand such increases, he said.

After last week’s announcement, ANZ’s economists now forecast another 50bps lift in July, before the Reserve Bank returned to a more normal pace of hiking.

Mr Kelleher said the OCR was one of several factors influencing bank lending rates.

Rising wholesale interest rates across the year had also affected home loan rates. —