Kiwibank hikes interest rates

Kiwibank has followed ANZ's lead by lifting its home loan interest rates.
Kiwibank has followed ANZ's lead by lifting its home loan interest rates.

Kiwibank has announced it will lift its home loan rates in response to yesterday's Reserve Bank decision to increase the Official Cash Rate.

The banks floating rate and its revolving credit home loan product will increase by 0.25 per cent to 5.90 per cent and its Offset Mortgage rate will increase from 5.25 per cent to 5.60 per cent, Kiwibank said in a statement.

The home loan increases will take effect from 31 March for existing customers.

ANZ was the first cab off the interest rate hike rank yesterday, lifting rates on its floating and flexible home loans and its headline deposit product, Serious Saver by 0.25 per cent.

Reserve Bank governor Graeme Wheeler has signalled "an aggressive, front-loaded start" to the interest rate cycle now under way.

He delivered the rise he had all but promised in the official cash rate from 2.5 to 2.75 per cent yesterday and indicated that the only question in the bank's mind at this stage - if the facts change it will change its mind - is whether there will be another three or four similar increases by the end of the year.

The interest rate projections the monetary policy statement has pencilled in suggest further OCR hikes April, June and July.

Also read - Liam Dann: How much the rate rises will cost me?

Click here to view a history of the OCR movements since its introduction in 1999.

Brian Fallow: OCR hike 'just the start':

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OCR increased to 2.75pc - Graeme Wheeler's announcement:

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Read the full Monetary Policy Statement here.

- NZ Herald

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