Kiwibank has hiked two of its fixed mortgage rates for people who have deposits of less than 20 per cent.

A number of changes announced today were the result of new restrictions on low equity lending and the rising cost of funding, the bank said.

Its one-year home loan special of 4.89 per cent is now only available to customers with 20 per cent or more equity in the property. People with less than 20 per cent will pay a higher rate of 5.25 per cent.

Kiwibank is also splitting its two-year fixed loan into two rates - 5.75 per cent for those with 20 per cent or more equity and 5.95 per cent for those with less than 20 per cent.


As of Monday, the bank will lift its three-year rate to 6.40 per cent, four-year rate to 6.70 per cent and five-year rate to 6.90 per cent. Those rates will apply to all customers, regardless of deposit size.

Westpac has also increased all of its home loan fixed mortgage rates this week, bar its one-year rate.

In an announcement earlier this week, Westpac said the change of rates was due to an increase in wholesale funding costs.

Changes kicking in on October 1 mean only 10 per cent of the value of banks' new lending can be on loan-to-value ratios (LVRs) of more than 80 per cent.