ANZ has again wasted little time in reacting to the Reserve Bank's Official Cash Rate increase, lifting its floating and flexible home loan rates by 25 basis points and its "serious saver" deposit rate by the same amount.
The moves lift its floating mortgage rate to 6.49%, its flexible rate to 6.60% and its serious saver rate to 4.50%. The increases take effect for the floating rate from Monday, June 16, and June 30 for the flexible rate increase, and July 1 for the serious saver increase.
"Retail interest rates are shaped by a range of market and economic factors, of which the OCR is one," ANZ says.
"The Reserve Bank has signalled a series of further increases in the OCR, reflecting its confidence that the economy is rebounding strongly. This will further affect interest rates for New Zealand consumers. It would be sensible for anyone with a home loan, or anyone considering one, to make sure their budget is planned so they can comfortably manage further increases in interest rates."
The Reserve Bank this morning increased the OCR for the third time this year, to 3.25%. ANZ was also the first bank to lift rates after the OCR hikes in March and April.
See all banks' carded, or advertised, home loan rates here.
ANZ's new floating home loan rates compare with their main rivals today as follows:
| below 80% LVR | Floating | Revolving |
| Credit | ||
 |
6.49% | 6.60% |
 |
6.25% | 6.25% |
 - Total Money |
6.24% | |
|
- Standard & FlyBuys |
6.34% | 6.34% |
| Kiwibank | 6.15% | 6.15% |
 |
5.99% | 6.25% |
| Co-op Bank | 6.20% | 6.20% |
 |
6.39% | 6.70% |
 |
6.15% | 6.15% |
| TSB | 6.29% | 6.04% |
--------------------------------------------------------------
Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »
--------------------------------------------------------------
Mortgage rates
Select chart tabs
8 Comments
Tell me, when the OCR goes up 0.25% and the banks put up their floating rates by 0.25%pa, I believe that this goes straight into their profits, aside from the extra amount they have to pay on savings accounts.
I have been told that banks mainly are funded from overseas where the lending rates are low eg 1%, 2% etc.
It seems that the Reserve Bank is in effect just making more money for the big Australian banks and taking from the pockets of hard working Kiwi families. Aside also from taking away from the revenue of exporters by way of a rising exchange rate while encountering a 26% drop in dairy prices at the time time.
How does the RBNZ justify the financial stress they cause a large chunk of New Zealand when they are trying to control higher house prices in Auckland while many parts of the country have falling prices eg Greymouth, Hasting and Whanganui to name a few?
The Government advertises NZ as a place to immigrate to, and then when the immigrants arrive to Auckland mainly and put pressure on housing, they penalise everyone for it.
A better solution would be for the Government to incentivise employers to relocate some of their workplaces to small towns gradually. Eg, if every one of the banks, insurance companies and internet companies who hire say 50 people in a call centre every year opened a small additional call centre in Whanganui or hastings, this would create jobs in smaller places and at the same time redistribute the housing pressure elsewhere and overall more evenly across NZ.
Yes, the impact in regional areas will be worse than last time. With little impact on Auckland house prices, the hikes will hit small businesses, exporters, wage/salary earners with mortgages, and will prop up a high NZ dollar.
One wonders if the RBNZ has NZ best interests as the main priority.
When banks profit while small business and households suffer.
A local accountant has graphed interest rates from 1990 to 2013 against house prices. Not much correlation. However, migration charted to house prices has a much clearer correlation. Of course, correlation does not necessarily mean causation, but it makes you wonder if hiking actually achieves the stated aims anyway.
Stanley - you might have been told right, but accidently mislead. Banks generally raise offshore funds in the currency of the country accessed, typically USD or EURs. However, they certainly do not carry currency risk in doing so e.g. the NZ private sector borrowers (kiwi fruit farmers) of the 1980's who borrowed 4% Swiss Francs, probably 15% plus below NZ rates at the time, but took massive hits when the NZD fell and they had to repay with low value NZDs. Banks always swap their foreign currency borrowings into NZDs when they borrow the money, and the FX swap costs are exactly the interest rate differential between the two currencies i.e. depending upon the term, borrow USDs at 1%, pay 3% FX swap costs, and youve raised 4% NZ equivalent money (plus the funding cost charged to banks these days when they lend to each other) .
Youre right that if theyre raising borrowing rates, and not raising deposit rates by the same extent, then their margins will go up - but there's two parts to the equation for banks, margins and volume. Competitive pressures quickly hit those margins as they all compete for volume/and market share, just look at what happened to fixed rates these past two months (down to March MPS levels) until the RBNZ fired at warning shot at them on Thursday
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.