BNZ joins Westpac in lifting mortgage interest rates, 5-year term biggest jump

A second major bank is lifting its mortgage interest rates.

A second major bank has lifted its mortgage interest rates, after Westpac announced rises on its one to five year terms.

BNZ has increased its 18-month rate from 4.64% o 4.69% and its two-year rate from 4.69% to 4.89%.

The bank also increased its three and four-year rates by 0.30% to 5.29% and 5.49% respectively.

The five-year rate increases the most, jumping from 5.29% to 5.69%.

There’s no change to the six-month or one year terms, which remain at 4.49%.

The changes are effective immediately, the bank said.

BNZ has lifted its mortgage interest rates today. Photo / Alex Burton/Portable Images

Westpac rates also rose today, after the bank announced increases to all but their six-month rate yesterday.

The one-year and 18-month rate rose 0.10% and 0.16% to 4.59% and 4.85%, and the two- and three-year rates by 0.30% to 5.19% and 5.29% respectively.

The four-year rate is now 5.39% - up 0.20% - and the five-year rate 5.59%, up 0.30%.

The six-month rate was unchanged at 4.49%.

BNZ, along with ANZ and Kiwibank, have the cheapest one-year mortgage interest rate, at 4.49%, with ASB and Westpac on 4.59%, according to interest.co.nz

BNZ had been leading the two-year rate, but its new 4.89% rate was now equal with ANZ and Kiwibank. ASB’s two-year rate is 4.95%, ahead of Westpac’s 5.19%.

Interest rates are going up because wholesale rates had 'increased significantly in recent weeks', a Westpac leader says. Photo / Alex Burton/Portable Images

For three-year terms, Kiwibank’s 5.25% is the most competitive, compared to ANZ and ASB’s 5.19% and BNZ and Westpac’s 5.29%, according to interest.co.nz

In the five-year category, Westpac leads the pack at 5.59%, with ASB and BNZ on 5.69%, Kiwibank at 5.79% and ANZ offering 5.99%.

Westpac NZ product, sustainability and marketing managing director Sarah Hearn said yesterday the increase was due to wholesale rates increasing “significantly in recent weeks”, upping funding costs for lenders.

“With [the] changes we are absorbing some of those increased costs, and also passing on higher rates to our savings customers, including the best 1-year term deposit rate of the five biggest banks as of Tuesday morning.”

The bank encouraged borrowers and savers to get in touch to talk the best options for them, she said.

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