PSIS and Southern Cross Building Society raised fixed mortgage rates this morning by between 5 to 25 basis points, but have left their variable rates unchanged. Fixed mortgage rates have generally been rising over the last two months while the only rates remaining stationary are variable rates, which are expected to remain at current levels in the first half of 2010 as the Reserve Bank keeps the Official Cash Rate at its record low of 2.5%. See and compare all mortgage rates here. The move in the New Zealand mortgage rate market to a 'positive' rate curve, where variable rates become the lowest on offer and five year rates are the highest, is in contrast to what was the case over much of the last decade. The lower variable and short term rates have increasingly attracted borrowers who decided against fixing for longer terms. This has increased the potency of the RBNZ's monetary policy, as changes in the OCR have a much stronger and quicker flow through to variable and short term interest rates than longer term ones. PSIS this morning raised its six month and one year mortgage rates by 25 and 10 basis points (bps), respectively. The financial services co-op's new six month mortgage rate is 5.7% and its new one year rate is 5.95%. Southern Cross raised its six month mortgage rate by 15 bps to 5.6%; its one year rate by 10 bps to 5.9%; two year by 5 bps to 6.9%; and three year by 5 bps to 7.8%. Credit Union North raised its one year mortgage rate by 20 bps to 6.2%.
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