BNZ has raised its six month mortgage rates in a move that takes them above the bank's lowest variable rate. Fixed mortgage rates have been rising in recent months, while variable rates have been stable as the Reserve Bank keeps the Official Cash Rate at its record low of 2.5%. BNZ raised its Standard and Fly Buys six month mortgage rate by 25 basis points to 5.75%. It also raised its Global Plus rate by 25 bps to 5.85%. BNZ currently has its TotalMoney variable rate at 5.59%, giving the bank a 'positive' mortgage rate curve where variable rates are the lowest on offer and longer term rates are the highest. The move in the mortgage rate market to a positive rate curve is the opposite to what has been seen in New Zealand over much of the last decade. The effect of having low variable and short term rates compared to higher long term rates has seen more borrowers move to shorter term and variable offers from banks. Economists have noted that this gives the Reserve Bank's OCR much more potency because any OCR change flows through to home owners much quicker. Meanwhile, TSB also hiked its six month mortgage rate by 25 bps to 5.75%. Westpac currently has the lowest six month mortgage rate on offer out of the main banks at 5.49%. HSBC is also offering this rate, but conditions apply such as the loan must be above NZ$500,000. National Bank is offering 5.7%, ANZ 5.99%, while ASB and SBS are offering 6%. Kiwibank is offering 5.75% for a six month mortgage rate. See and compare all mortgage rates here The next big event that could have an impact on interest rates is the Reserve Bank's Monetary Policy Statement and OCR update on Thursday morning. Markets will be watching closely for any hints that the RBNZ may be looking to raise the OCR sooner that the second half of 2010. The RBNZ has said since the end of April that it expected to keep the OCR at or below its current level until the latter part of 2010. The wording changed slightly in its latest MPS at the end of October to: "we expect to keep the OCR at the current level until the second half of 2010".
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