BNZ has followed ANZ and raised its floating mortgage rate by less than the Reserve Bank's Official Cash Rate increase, completing the adjustments from the main banks. But the challenger banks are all yet to follow.
The BNZ increase is just +15 bps. But that makes it the second most expensive floating rate at 4.70% after Westpac's 4.84%. Kiwibank has the lowest floating rate among the main banks at 4.00%.
BNZ has not signaled any term deposit rate changes at this time.
The RBNZ hiked the OCR by 25 basis points on Wednesday and ANZ was the first to signal its change.
ASB was next out of the blocks saying it's "committed to holding its base business interest rate through to the end of 2021."
So, ASB’s variable home lending rate is unchanged at 4.45%.
Meanwhile, Kiwibank announced a series of increases to mortgage and savings rates.
Kiwibank's variable, offset and revolving lending rates are going up by the full +25 basis points. The new variable and offset rate will be 4%, and the revolving rate is being increased to 4.05%.
Then Westpac pushed through a full +25 bps hike, although it also raised some savings account rates modestly.
One useful way to make sense of these changed home loan rates is to use our full-function mortgage calculator which is also below. (Term deposit rates can be assessed using this calculator). But most calculators are really only useful for fixed rate mortgages.
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. But break fees should be minimal in a rising market.
Here is how the floating rates of the main retail banks compare now.
| as at October 8, 2021 | Current | change | New | Effective |
| % | bps | % | for existing | |
| ANZ | 4.44 | +15 | 4.59 | 26-Oct-21 |
| ASB | 4.45 | no change | 4.45 | n.a. |
| BNZ | 4.55 | +15 | 4.70 | 28-Oct-21 |
| Kiwibank | 3.75 | +25 | 4.00 | 25-Oct-21 |
| Westpac | 4.59 | +25 | 4.84 | 1-Nov-21 |
| Bank of China | 4.35 | |||
| CCB | 5.00 | |||
| Cooperative Bank | 4.40 | +15 | 4.55 | 14-Oct-21 |
| Heartland Bank | 2.55 | |||
| HSBC | 4.49 | +10 | 4.59 | 2-Nov-21 |
| ICBC | 3.69 | |||
| SBS Bank | 4.54 | +25 | 4.79 | 16-Nov-21 |
| TSB | 4.54 |
We will update this table as each bank announces its rate reaction for home loans.
*You can see all advertised, or carded, bank term deposit rates for one to nine months here, and all rates for one to five years here.
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12 Comments
Nobody was really expecting a further full 25 basic points general increase to savings and mortgage rates, as this OCR increase was already mostly priced in by the market. So the title does not really make all the sense, to be perfectly honest.
I was actually slightly surprised by Westpac pushing through a full +25 bps hike; I was expecting a general increase by most banks of something more in the order of 10 to 15 bps, definitely not a full 25 bps.
What pleasantly surprised me was to finally see a hawkish tone by the RBNZ; even Orr might have finally come to a very belated realization that current ridiculous low rates are simply not sustainable.
To maximise profits the banks make a move higher in advance of the RB, claiming RB will follow, then when the RB moves they make another hike up.
Basically doubling up on the profits, while still drawing down the much lower RBNZ FLP rate, huge windfalls for the banks overall, the smiling assassins of finance slip the knife in your back while all the time claiming hardship.
A large number of recent buyers in the market will find out soon enough why there is a saying about Banks being Fair-weather Friends.
Both correct and incorrect.
The banks have already added in .50-.60 BP on their fixed home loans since July. So they have put through double the OCR already on fixed home loans. 85% of NZ loans are currently fixed with 70% on 12 month rates.
The banks didnt need to adjust their fixed home loans as they had already increased on these between July and Sept. That said will be interesting to see if they adjust these fixed rates another quarter between now and the Nov RBNZ meeting.
What most banks have adjusted this week is their variable loan rates which make up a small proportion of their loan books. Typically offset and lines of credit loans have a variable rate - although some borrowers who want to vary their payments each month maybe just on a standard variable rate. These loan rates were not as heavily reduced when the OCR dropped. ie Westpac before the 2019 OCR drops had a variable rate of 5.65% - they moved this to 4.55% between Aug 19 and Mar 20- which is just a 1.1% reduction even though the OCR fell 1.5% during that time.
I believe the average reduction across the banks on their variable rates since Aug 19 was 1.2% - so they are in a position to pass less of the OCR increase through to their customers on variable loans.
Either way most home borrowers will have felt/ or about to feel a lift in their monthly repayments. Only those who fixed for a >2 year rate before July this year will be immune from the rate increases.
ASB TD's rates have remained unchanged for months and they have still not shifted as of today so not exactly "already priced in". I guess its going to take the next 0.25% increase in November to get things moving. Time to fix that mortgage if your lucky enough to have it due right now.
So many commenters who conflate fixed and variable rates and costs! Variable rates are typically more closely aligned with OCR and of course the RBNZ funding for lending program is directly linked.
fixed swaps are driven off market expectations and offshore activity… these drive retail fixed rates… mortgage and term deposit.
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