Mortgage rates up at ANZ

ANZ has this morning raised its six month, one and two year mortgage rates by a quarter of a per cent.

This follows a similar move by ASB around a week ago.

ANZ raised its six month rate to 5.99 per cent; its one year rate to 6.2 per cent; and two year rate to 7.25 per cent. ANZ left its 18 month rate unchanged at 6.69 per cent.

ANZ also left its variable mortgage rates unchanged. Variable rates are expected to stay low into 2010 as the Reserve Bank of New Zealand (RBNZ) keeps the Official Cash Rate (OCR) on hold at 2.5 per cent until "the second half of 2010".

However, fixed rates are rising as banks forecast hikes in the OCR from around the middle of next year as the economy recovers and consumers begin to spend more.

Banks are also fighting hard for local term deposits which is driving up interest rates. This follows new bank funding guidelines from the Reserve Bank released mid-way through this year.

Banks are being required to raise more funds locally and for longer terms, which has put upward pressure on both term deposit and mortgage rates.

- INTEREST.CO.NZ