Kiwibank is lowering the interest rate on two-year home loans as other banks raise interest rates
Kiwibank cut its two-year fixed mortgage rate to 2.49 percent, but commentators say the time to take advantage of the low fixed-term mortgage rates is getting closer.
The move by Kiwibank came after a surprising surge in inflation to an annual rate of 3.3 percent, which solidifies expectations that the Reserve Bank will raise the official cash rate (OCR) to 0.5 percent next month.
The Reserve Bank kept the OCR at 0.25 percent when it released its monetary policy review on Wednesday.
ANZ, ASB, BNZ and Westpac all forecast OCR will rise in August after the Reserve Bank called “quantitative easing”.
* Kiwibank and ASB raise interest rates on time deposits when interest rate expectations rise
* ASB begins loan settlement payments of $ 8.1 million to 73,000 borrowers
* “We’re going into the twilight zone”: Largest bank forecasts negative interest rates
Many banks raised interest rates overnight on Thursday.
Fixed-term mortgages at Westpac have all gone up. Six-month to three-year mortgages rose 0.30 percent, while four- and five-year mortgages rose 0.10 percent, with floating rates unchanged.
The interest on Westpac time deposits between two and five years rose to up to 0.20 percent.
An ANZ spokeswoman said she had increased her mortgage rates in response to a number of market factors, one important factor being the gradual increase in wholesale rates.
The bank’s one-year, 18-month, two-, and three-year fixed-rate mortgages all rose 0.25 to 0.39 percent, and the same changes were reflected in the special fixed-rate mortgages.
All of the bank’s term mortgages rose overnight. The “classic” one-year mortgage rate rose 2.55 percent, while the five-year mortgage rate rose to 3.99 percent, the highest rate.
The bank’s Standard and Flybuys loans rose faster, with a one-year fixed-term mortgage rate now reaching 3.15 percent and a five-year mortgage reaching 4.59 percent.
The variable interest rate of the Kiwibank also increases from 3.4 percent to 3.75 percent. Changes would take effect on July 19.
On Wednesday morning, Kiwibank announced that it would raise its fixed-term deposit rate for the 200-day term from 0.8 percent to 1.2 percent, while ASB is offering changes for fixed-term deposits between six months and five years.
The BNZ’s fixed-term deposits rose between 1 percent for a term of 209 days and 1.7 percent for a term of four years.