By NAOMI LARKIN and NZPA
Two banks have raised their mortgage floating interest rates but other key money lenders are remaining coy about their plans.
ANZ Bank and the Bank of New Zealand have become the first retail banks to increase floating mortgages after last week's Reserve Bank decision to raise the official cash rate.
Their floating rates will rise by 50 percentage points, from 7.6 per cent to 8.1 per cent, adding $10 a week to the cost of a $100,000 mortgage.
The move comes as uncertainty about rates appears to be deterring people from building new homes.
Statistics New Zealand said yesterday that the number of estimated consents for new dwellings last month was the lowest February total since 1993. It came after approvals fell in January to their lowest level since October 1998.
"The latest figures suggest that the decline in consents issued may be more long term, with uncertainty over rising interest rates and a general downturn in the real estate market being likely contributing factors," Deputy Government Statistician Ian Ewing said.
A sharp fall in Waitakere City consents was the major factor behind last month's monthly decline, the number of permits having halved.
While two major banks have increased rates, spokeswomen for WestpacTrust, National Bank and ASB Bank last night declined to say if increases were planned. All said the situation was under review.
Last Wednesday, the Governor of the Reserve Bank, Dr Don Brash, raised the official cash rate 50 basis points to 5.75 per cent and predicted further increases.
The rise was expected to have a flow-on effect for mortgage interest rates.
The new BNZ rate was effective from yesterday for new customers and from April 3 for existing borrowers.
ANZ's increase will affect new applications from tomorrow and existing customers from April 11.
If the economy moves as Dr Brash expects, homeowners will be paying 9 to 9.5 per cent in mortgage interest next year and in 2002.
This would add an extra $1500 a year, or $30 a week, to repayments on a $100,000 mortgage.
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