Source: Radio New Zealand
The changes bring ASB and Kiwibank into line with all other major banks. SUPPLIED
Fast changes in wholesale interest rates have seen ASB and Kiwibank become the last of the major bank lenders to hike their longer term fixed home loan rates.
ASB’s increases range between 10 to 20 basis points for loans fixed between 1 and 3 years, while Kiwibank has made adjustments to its 2 to 5 year rates. Both banks have shaved a little off their six month offering.
The changes bring ASB and Kiwibank into line with all other major banks, which have also bumped up rates in recent weeks.
ASB chief economist Nick Tuffley says the switch from talk of cuts to possible interest rate hikes in the Reserve Bank’s latest outlook has compelled markets to adjust pricing.
“We’ve seen for 2 year rates, a good 50 basis point increase in wholesale rates and nearly 60 for the 3 year, since the Reserve Bank’s statement last year, so to date the moves we’ve seen with mortgage rates aren’t really keeping up with that yet.”
Nick Tuffley says all banks are seeing similar impacts on their funding costs, leading them to pass on the increases to borrowers.
“I think the key message for people is that period of really low interest rates, super low interest rates, has gone, but the market’s settling into a reality of the cash rate’s likely to be on hold for most of this year, but we’re past the lows now,”
While tough for borrowers, savers will benefit from higher term deposit rates across the board, with banks looking to attract funding. Term deposit rates beyond the 9 month mark have had a significant adjustment, up anywhere between 5 and 35 basis points.
“Not too long ago, you could get a 2 year mortgage for not less than 4 and 4.5 percent,” says Nick Tuffley.
“Now you can put money on deposit for two years at 4% percent so quite a catch-up.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
