PHOTO: The stress banks are putting on NZ Mortgage holders is huge. RAWPIXEL
Major New Zealand banks, including the Bank of New Zealand (BNZ), have recently chosen to increase their home loan rates, despite the Reserve Bank’s official cash rate remaining stable. BNZ, in particular, has announced an adjustment to its one-year home loan rate, which will now stand at 7.25 percent for borrowers holding at least 20 percent equity, up from its previous rate of 7.19 percent.
This decision follows ANZ’s move, Aotearoa’s largest bank, which, just a few days ago, declared a rate hike across its entire home loan portfolio. Specifically, ANZ’s 12-month fixed rate has increased by 14 basis points, reaching a standard rate of 7.99 percent and a special rate of 7.39 percent. This Australian-owned bank has also increased some of its term deposit rates, including those for six-month and five-year terms.
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BNZ’s adjustments extend beyond its one-year rate, with the standard one-year rate now at 7.85 percent, while the standard rates for three years and longer terms are at 7.45 percent and 7.35 percent, respectively. Additionally, their one-year fixed home loan rate has risen by 14 basis points, with a standard rate of 7.99 percent and a special rate of 7.39 percent. The special three-year rate has increased from 6.69 percent to 6.85 percent, and the special four-year and five-year rates are now at 6.75 percent, marking a 0.06 percent increase.
Interestingly, these changes have occurred in spite of the Reserve Bank’s official cash rate remaining steady for an extended period. Notably, over the last month, most banks have raised their rates, with many longer-term rates surpassing the 7 percent threshold. Westpac, for instance, attributed this upward trend to rising wholesale rates, which they rely on to finance their home lending operations.