Economy – ASB increases savings deposit rates; moves home loan rates following OCR increase

Source: MIL-OSI Submissions
Source: ASB

ASB will make changes to some interest rates following the Reserve Bank of New Zealand’s announcement today it is increasing the Official Cash Rate (OCR) by 0.25%.

Deposit rates on Savings Plus and Headstart savings accounts will increase by 0.25%, taking the maximum interest rate on these accounts to 0.65%.

Craig Sims, executive general manager Retail Banking says, “No matter what stage you’re at in life, having a regular savings habit is a proven way to boost financial wellbeing. We’re hoping more of our customers will be a step closer to meeting their financial goals as we increase interest rates across our Savings Plus bonus saver and Headstart youth savings products.”

In October, ASB committed to hold off passing through any OCR increases for the rest of 2021 to its Business Base Rate in recognition of the tough trading conditions many small business owners are currently facing. ASB’s business banking rates can be viewed here. 

Today’s changes to the OCR will also see changes to ASB’s variable home lending rates.  ASB held these rates following October’s OCR increase and today’s changes will be partially passed through to customers in reflection of changing market conditions. ASB will pass through 0.15% of the 0.25% OCR increase to Housing Variable rates, taking this rate to 4.60% and the Orbit home loan rate to 4.70%.

ASB’s low cost Back My Build rate for new home builds, which is linked to the Official Cash Rate will increase to 2.29%.

New variable rates are effective for all new housing loans from 1 December 2021 and will be applied to existing loans from 8 December 2021.

“We’d encourage any customers wanting to know more about today’s changes to contact us,” says Mr Sims.

“Whether it’s an in-person conversation with one of our specialist bankers, or mapping out repayments in the comfort of your own home using our online tools and calculators available at asb.co.nz, we’re here to help with practical guidance around loan structures and lending.”

ASB Rate Changes:

*Effective from 1 January 2022. **Effective from 1 December 2021

*Back My Build effective from 1 December 2021 for new lending and 8 December for existing customers

MIL OSI