New Zealand wholesale interest rates rose on Monday, with the two year swap rate rising 5 basis points from Friday to 4.2%, its highest level since January 13. A pickup in mortgage fixing in the last week has led to a pickup in swaps and fixed mortgage rates as borrowers rushed to fix before rates rose, which in turn forced the banks into the wholesale market to cover their lending. This push-me-pull-you relationship between wholesale and retail interest rates ends up becoming a chicken-or-the-egg situation where expectations of higher rates turn into actual higher rates. Nelson Building Society and Kookmin Bank both raised their two year fixed mortgage rates. These moves follow a flurry of fixed mortgage rate hikes by the major banks last week. Kookmin Bank raised its two year mortgage rate by 16 basis points (bps) to 6.55%. Nelson Building Society raised its two year rate by 25 bps to 6.75%. See and compare all the rates on our mortgage rates page.
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