- Higher home loan rates are adding to the increased cost of living for Kiwis.
- Banks have been increasing home loan rates amid soaring domestic inflation and increased market volatility.
- ANZ, Kiwibank and BNZ are some banks that have raised their home loan rates.
There has recently been a substantial increase in wholesale market rates due to soaring domestic inflation and increased volatility across markets. Wholesale rates are the prices banks pay to borrow funds from big institutional investors.
Banks have increased fixed home loan rates and term investment rates to help customers meet their savings and investment objectives. Higher home loan rates are due to increasing funding costs as markets price in rate hike expectations by RBNZ.
Higher home loan rates are adding to the increased cost of living for Kiwis and taking a big proportion of the disposable income of households.
Amid this backdrop, let’s see which banks have recently raised their home loan lending rates.
Source: © Kiosea39 | Megapixl.com
Australia and New Zealand Banking Group Limited
The biggest home lender of NZ, ANZ, increased its 5-year fixed rate to 6.95%, up by 50 bps on 22 June.
The new 1-year, 2-year and 3-year fixed special rates for people with over 20% equity increased to 5.35%, 5.8% and 5.99%, up by 50bps, 45bps and 34bps, respectively.
ANZ also sharply increased its term deposit rate, with the new 6-month rate increasing by 25bps and the 1-year rate by 50bps.
Bank of New Zealand
BNZ, following the footsteps of ANZ, also raised interest rates on home loans and deposits. The bank raised its 1-year and 2-year fixed home loan rates to 5.35% and 5.69% for people with over 20% equity in their homes, up from 4.85% and 5.19%, respectively.
BNZ also started offering better term deposit rates with its 1-year term deposit rate increasing to 3.65% from 3.15% for deposits ranging from $2000 to $5 million.
Kiwibank increased its 1-year fixed home loan rate for people with equity of 20% or more at 5.19% from 4.85% but raised its 2-year rate to 5.69% from 5.19%.
The 1-year fixed home loan rate for low-equity borrowers increased from 6.1% to 6.45%. Kiwibank also increased its term deposit rates from 3.3% to 3.75%.
ASB increased its 1-year, 2-year and 3-year fixed loan rate to 5.35%, 5.8% and 5.99%, up by 50bps, 45bps and 34bps, respectively.
ASB has estimated that higher home loan rates will contribute $5.6 billion to household outgoings in the next 18 months.
Kiwis are undergoing an increased cost of living with swiftly rising interest rates and wages plummeting.