(Updates 18 month rate changes, corrects Classic 3 year rate withdrawal, notes term deposit rate rises.)
BNZ has raised fixed mortgage rates, hard on the heels of Reserve Bank confirmation on incoming high loan-to-value ratio policy restrictions.
The bank has reintroduced its 18 month Classic home loan 'fighting brand', with a 5.59% rate. This rate is only for customers who have at least 20% equity in the property provided as security.
BNZ has withdrawn its Classic 3 year rate.
They have raised their fighting brand, the Classic 3 year rate to 6.29%, up 30 bps from 5.99%.
And BNZ has raised all other fixed mortgage rates, mostly by 30 basis points as well, although there are variances around this increase as follows.
The Standard, FlyBuys, GlobalPlus rates for one year fixed have been raised by only 14 basis points, to 5.39% from 5.25%.
The regular 18 month rate, only available in their GlobalPlus product, is now 5.80%, up 30 basis points from 5.50%.
The two year fixed rate is also up 30 basis points to 5.95% from 5.65%.
Three years fixed rises to 6.29%, only up 20 basis points from 6.09%.
Four years rises to 6.60%, and five years rises to 6.90%, up 30 basis points from 6.30% and 6.60%, respectively.
BNZ is the only bank to have a carded seven-year fixed rate and this has been increased to 7.45%, up 36 basis points from 7.09%.
At the same time, BNZ has raised a number of term deposit rates. See our separate story on these changes.
These rate rises are unexpected for two reasons. Firstly, swap rates fell back a bit yesterday following Reserve Bank Governor Graeme Wheeler's imposition of LVR restrictions and the comments he made when he announced them.
And markets are reassessing how soon the Official Cash Rate will need to be raised now that new macro-prudential tools are in place to address some of the Auckland/Christchurch housing price pressures.
See all advertised mortgage rates here.
| 1 yr | 2 yrs | 3 yrs | 4 yrs | 5 yrs | |
 |
4.95% | 5.65% | 6.05% | 6.30% | 6.60% |
 |
5.25% | 5.65% | 6.05% | 6.30% | 6.60% |
| BNZ | 5.39% | 5.95% | 6.29% | 6.60% | 6.90% |
| Kiwibank | 4.89% | 5.50% | 6.05% | 6.30% | 6.60% |
 |
5.19% | 5.65% | 6.04% | 6.30% | 6.60% |
| Co-op Bank | 4.94% | 5.50% | 5.95% | 6.25% | |
| HSBC Premier | 4.99% | 5.65% | 6.05% | 6.30% | 6.60% |
| SBS / HBS | 4.95% | 5.45% | 5.80% | 5.99% | |
 |
5.25% | 5.50% | 6.05% | 6.30% | 6.60% |
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9 Comments
Interest rates up at the BNZ. What does this mean? Noticeably again it's only on fixed rates. It's not on floating, continuing the consistent pattern of recent times.
While I believe trying to predict rates is at best a lottery there is something to think about here. All the fuss in the last few days is about people who might not be able to get a loan. But the ones we should worry about are those who have them. Especially in Auckland where there are so many people who are stretched to the limits by their mortgage already.
What happens with any interest rate rise then. Coupled with very fragile and inflated purchase prices, very vunerable to any change in the wind internationally.
Is this going to ruin people like me over the next few years who will be going down to one income due to babies on the way and a fresh house purchase in the current high market? My guess 50% having to sell and move into rental accomodation so rents go up and disposable income looks the same as the inside of a not so fresh nappy.
I don't want to sound harsh, but interest rates were always going to go back up again. They are currently artifically low partly due to the GFC and christchurch earthquakes. So when you borrowed you should have allowed for the interest rates to go upwards to 8 percent at least. But I suspect there are many people in a similar position, and people won't want to sell for less than they purhcased it for, neither will the bank want to lose money. But at the end of the day, banks never lose.
I'll be up front and say I dont think rates will go up for long or far. I think the GFC isnt over and will get worse, so my take is the OCR wont go above 4% ever again or if so not for long....I think under 2% is more likely and way more likely than over 5%...
"people won't want to sell for less than they purhcased it for" personally I see this as the really harsh bit, I see 60~75% price drops...but then I am a tiny minority....time will tell whos right..
regards
or the FED tapering off buying toxic assets.. Crazy thing is the US had some good economic data (well thats relaitive, but anyway) and ppl sold shares as they feared teh Fed easing out. Yet I'd expect ppl to buy shares because there was a recovery....very strange.
or they think the risk is getting worse so expect bigger returns...
regards
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