ASB and Westpac raise fixed mortgage rates as OCR hike talk grows (Update 1)

ASB and its subsidiaries Sovereign and Bank Direct have raised fixed mortgage rates across the board in a sign that another round of rate hikes has begun. Westpac followed up with its own fixed mortgage rate increases later on Friday. (Update 1 includes Westpac rate hikes) The latest moves includes a six month rate hike. Six month rates have generally been falling or static in recent weeks, along with variable rates, while longer fixed rates have been rising. See all mortgage rates here. The latest move suggests six month rates may have reached their bottom as wholesale interest rates begin to rise amid talk the Reserve Bank of New Zealand may be forced to raise the Official Cash Rate earlier than the latter part of 2010, which it has been indicating since midway through the year. Stronger than expected inflation figures on Thursday, and repeated signs of economic recovery, have pushed up wholesale interest rates, with markets now expecting the first RBNZ rate hike in January. Here are the rate changes: ASB raised its six month rate by 25 basis points (bps) to 5.75%; one year by 20 bps to 6%; 18 month by 20 bps to 6.6%; two year by 20 bps to 7.15%; three year by 20 bps to 7.95%; four year by 25 bps to 8.5%; and five year by 15 bps to 8.75%. ASB's fixed rates are now 5 to 35 basis points above those of its major rivals. Its standard one year rate is now the only one above 6%. Bank Direct raised its rates to the same levels as ASB's rates. Sovereign raised its six month rate by 25 bps to 5.9%; its one year rate by 20 bps to 6.15%; 18 month by 20 bps to 6.75%; two year by 20 bps to 7.3%; three year by 20 bps to 8.1%; four year by 25 bps to 8.65%; and five year by 15 bps to 8.9%. Sovereign tightened some of its lending criteria from the start of September, with the margin between its and ASB's rates now 15 bps. Westpac lifted its fixed rates by 10 to 40 basis points. Its six month rate rose 10 basis points to 5.39%, while its 1 year rate rose 40 basis points to 5.99%. See all bank and non-bank mortgage rates here.