Kiwibank, BNZ lift home loan rates
Kiwibank and Bank of New Zealand have lifted home loan rates, following lifts in mortgage rates announced last week by ANZ, ASB and Westpac.
Kiwibank has lifted its floating rate loans from 4.25 per cent to 4.5 per cent immediately for new loans, and it has lifted its revolving credit home loan rate from 4.3 per cent to 4.55 per cent.
The new rates will not apply for existing loans until March 14.
BNZ said it would lift its standard, Rapid Repay and Total Money floating rate home loans from 4.95 per cent to 5.15 per cent on March 17.
Banks have been lifting their home loan rates following the Reserve Bank Te Pū tea Matua lifting the official cash rate (OCR) on February 23.
The Reserve Bank also signalled that the OCR may need to rise to about 3.4 per cent by late 2024 to bring down inflation. It had previously been expecting the OCR to peak at about 2.6 per cent.
State-owned Kiwibank’s floating rate loans remain lower even after the move than its Australianowned rivals.
Kiwibank also lifted rates on some of its fixed rate loans.
So far, the big Australian banks have held off lifting their fixed rate loan rates, although the Cooperative Bank, which is owned by its depositors, has also lifted its floating and fixed rate home loan rates.
Rising home loan rates have led banks to forecast falls in house prices.
Reserve Bank governor Adrian Orr acknowledged the housing market was already softening, and the committee thought higher interest rates were ‘‘consistent with house prices becoming more sustainable’’.
Orr said last week there would be ‘‘small pockets’’ of homeowners, particularly those who had taken on large levels of debt recently, who could be in a position where they needed to manage negative equity – owing more than their properties were worth – ‘‘for some time’’.
As well as facing higher home loan rates, and high inflation, households are also having to cope with high petrol prices.
Kiwibank also announced it was lifting some deposit rates.
It lifted the interest it pays on its 90-day Notice Saver accounts to 1.75 per cent and interest on its 32-day Notice Saver accounts increased from 0.7 per cent to 0.8 per cent.
Interest paid on its online call account increased from 0.5 per cent to 0.6 per cent.