BNZ, SBS cut some mortgage rates, lift some term deposit and call account rates

Both BNZ and SBS Bank have increased some term deposit interest rates and cut some fixed mortgage rates.

BNZ has trimmed 15 basis points off its two year fixed home loan rate, reducing it to 6.70% from 6.85% and its three year rate by 5 basis points to 7.15% from 7.20%. SBS has reduced its two year fixed home loan rate by 10 basis points to 6.75%.

The cuts are among a wave of interest rate changes made by the banks since the Reserve Bank lifted the Official Cash Rate (OCR) on July 29 by 25 basis points to 3%. They’ve seen floating and fixed six month rates increase and longer term fixed rates come down. See story here.

See all bank mortgage rates here.

Meanwhile, BNZ said it was lifting the interest rates on its five month term deposits by 10 basis points to 5.10% from 5% and on nine month term deposits, also by 10 basis points, to 5.20% from 5.10%.

SBS has increased rates on some term deposits and introduced new five and nine month term deposits.See all term deposit rates up to nine months here.

BNZ and SBS increasing deposit rates comes after the ASB yesterday announced a 25 basis point lift in all its overnight and cash account rates making it the first of the major banks to lift deposit rates since the OCR hike. SBS is also increasing two of its call account rates. See all call account rates here.

Competition for term deposit money among the banks has increased since the introduction of the Reserve Bank’s core funding ratio (CFR) on April 1. This forces the banks to source at least 65% of their funding from retail deposits and bonds with durations of at least one year. The central bank wants to increase the CFR to 75% by mid-2012 to offset New Zealand banks reliance on international wholesale, or 'hot' money, markets.