A major bank has lifted its short and long-term mortgage interest rates, as the cost of borrowing rises amid global uncertainty sparked by ongoing conflict in the Middle East.
BNZ announced the rate increases this morning – effective immediately – a day after Kiwibank also hiked rates.
The four affected fixed-term rates each rose 0.10%, with the one-year rate now 4.59%, 18-month rate 4.79%, four-year rate 5.59% and the five-year rate 5.79%.
The two- and three-year rates remain at 4.89% and 5.29%. The six-month rate of 4.49%, a rate shared by the four other main banks – ANZ, ASB, Kiwibank and Westpac – is also unchanged.
BNZ had earlier increased all but its six-month and one-year terms last Wednesday.
The latest rises come a day after Kiwibank lifted its one, three, four and five-year fixed mortgage interest rates, with the longest term nudging 6%.
The state-owned bank also increased rates by 0.10%, with the one-year rate moving to 4.59%, the three-year to 5.35%, the four-year to 5.79% and the five-year to 5.89%.
Kiwibank’s six-month and two-year terms were unchanged at 4.49% and 4.89% respectively.
BNZ and Kiwibank’s 4.89 two-year rate is the most competitive of the big five banks, ahead of ANZ and ASB’s 5.09% and Westpac’s 5.19%, according to interest.co.nz
Before this morning’s increases, BNZ had the cheapest one-year home loan rate, at 4.49%.
Its new 4.59% rate now meant all five main banks were offering the same interest rate for one-year terms.
The most competitive 18-month rate is ASB’s 4.75%, just ahead of BNZ’s new 4.79% rate.
Westpac is at 4.85% and ANZ 4.89%, with Kiwibank not offering an 18-month term, according to interest.co.nz.
BNZ and Westpac’s 5.29% leads the pack for three-year terms, with rivals ANZ and ASB on 5.39% and Kiwibank a smidge lower at 5.35%.
Westpac has the cheapest four-year rate – 5.39% – but BNZ’s new 5.59% rate is still half a per cent lower than ANZ’s 6.09%. ASB and Kiwibank four-year terms are set at 5.55% and 5.79% respectively.
Five-year fixed-term interest rates range from Westpac’s 5.59% to ANZ’s 6.19%, with ASB, BNZ and Kiwibank on 5.69%, 5.79% and 5.89% respectively.
Westpac’s leading long-term offer was among rates across its one to five-year home loan terms that went up eight days ago.
The increase was because of wholesale rates increasing “significantly in recent weeks”, upping funding costs for lenders, Westpac NZ product, sustainability and marketing managing director Sarah Hearn said at the time.
“With [the] changes we are absorbing some of those increased costs, and also passing on higher rates to our savings customers, including the best one-year term deposit rate of the five biggest banks as of Tuesday morning.”
Reserve Bank Governor Anna Breman said yesterday the central bank was unlikely to hike the Official Cash Rate directly in response to oil price spikes pushing up inflation.
But the new Governor recognised high oil prices caused by conflict in the Middle East could eventually push businesses to lift their prices – and employees to demand higher wages – even if the economy was sluggish.
In this instance, New Zealand “could still see higher inflation in the medium term”, Breman said.