ANZ lifts rates in line with the OCR increase

Personal Finance / news

NZ's largest home loan lender raises its floating rates by the full 25 basis points of the RBNZ OCR hike, raises some savings rates too

24th Feb 22, 11:56am by David Chaston

ANZ is lifting mortgage rates following Wednesday's 25 basis points Official Cash Rate (OCR) hike by the Reserve Bank.

They are raising their floating rates by the full +25 basis points of the OCR increase.

That will take ANZ's Standard floating rate to 5.04%, up from 4.79% previously. Their revolving credit rate will rise to 5.15%.

Blueprint to Build is a discount off the floating rate

At the same time, they are raising some savings account interest rates by +25 bps as well. For example, ANZ's Serious Saver account rate will rise to a potential rate of 0.70%.

They are expecting more rises. A spokesperson said: "As the Reserve Bank moves to rein in inflation and bring some balance back to the economy they have signalled the OCR would continue to rise, potentially to around 3.4% by late 2024. If that happens, interest rates for lending and savings are likely to continue to rise too."

ANZ's new rates will be effective from the following dates:

Home lending Floating	New Loans	1 March
	Existing Loans	15 March
'Blueprint to Build' (2.76% discount)	New loans	1 March
	Existing loans	15 March
Home lending Flexible	New Loans	15 March
	Existing Loans	15 March
Business floating	New Loans	1 March
	Existing Loans	15 March
Business overdraft		15 March
Serious Saver		1 March

It is likely that all other banks will follow with similar increases, and soon.

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.

40 Comments

by Albert2020 | 24th Feb 22, 12:01pm 1645657311

If serious savers can look forward to 0.7% I would hate to think what you can expect if you're only semi-committed.

by Brock Landers | 24th Feb 22, 12:33pm 1645659186

Don't forget to subtract the tax from that 0.7%!

by Notgreedykiwi | 24th Feb 22, 1:35pm 1645662924

So banks taking in at 5% and giving back at 0.7%.

So white collar thiefs and our governments allowing this to happen. Really..

What sort of craziness

by Justa comment | 24th Feb 22, 2:43pm 1645667033

they pay their customers 0.7 and pay RBNZ 1.0, no favours to their customers here.

by PitU | 24th Feb 22, 12:16pm 1645658193

Now that interest rates seem to be normalising, property prices will follow suit. Let's go back to pre-pandemic levels as our dear leader said (announced) end of last year.

by lucenera | 24th Feb 22, 12:08pm 1645657699

so

loan 800000 per 30 years => house price 1000000

4.79% = 4,192 monthly

5.04 => 4,314 monthly

assuming the bank will preapprove on the same basis (you can afford 4,192 monthly)

then the total mortgage amount should be: 777,400

difference is 22600

=> down pressure total 2.8%

this is not taking in consideration the difference eventuate in the initial deposit

more to come?

by The Person | 24th Feb 22, 12:26pm 1645658761

banks don't test afforability on the current rate at the time of approval. Hence a change in the current rates does not affect affordability

by lucenera | 24th Feb 22, 1:04pm 1645661043

I am interested, honest question

On what they test affordability?

If that is on expected rates it is even worse than my maths

by printer8 | 24th Feb 22, 1:32pm 1645662745

lucenera

It is commonly referred to as a "stress test" rather than "affordability".

They have a higher rate than the loan rate that they test your ability to service the loan if mortgage rates were to go that high. Recently it has been around the 7% but it fluctuates at their discretion - its them being prudent in the event that interest rates go higher.

Note that it is a "stress" test - as with other stress tests, it is about your ability to withstand that level before breaking. With stress tests there will be considerable strain prior to reaching that point - for a mortgage holder that means really cutting back on expenditure.

by lucenera | 24th Feb 22, 1:36pm 1645663000

gotcha, makes sense, thanks

I am expecting that 7%-ish to be a function of current rates/expected rates, am I wrong?

If that is the case this move means anyways a noticeable down pressure (if not 2.8 as I calculated it will be a 2.1%)

right?

by printer8 | 24th Feb 22, 2:29pm 1645666161

lucenera

From what I am currently hearing is that banks are applying a considerable range of criteria to mortgage applications compared to this time last year. In addition to the main criteria last year (e.g. LVR, income, and “stress test”) banks have not only increased the thresholds, they are also considering a whole raft of other factors including spending patterns, greater attention to job security, discounting rental income, age etc. Anecdotally from a couple of very active investors I know, I’m hearing that applications that they could feel confident about last year are being outright rejected.

by lucenera | 24th Feb 22, 2:42pm 1645666963

yup, I was expecting something like that.

My preference would be that banks make more "public" these criterias, like with a simulation app. I don't see it difficult (assuming they already have something like that internally).

f(age,salary/ies, status, etcs) => you can ask for XXX

What I saw so far are very far fetched mortgage calculators that state that you can afford 3 millions but in reality they can give you 300k

by jasonnn | 24th Feb 22, 2:41pm 1645666906

These are called "test rates". ANZ was down at 5.8% last time I checked. A few years ago they were at 7%.

Last I heard, they were still at 5.8%, but might have increased lately.

They aren't fully public, but if you search hard enough you can usually find them.

This article from a while ago notes that it decreased to 5.8%.

https://www.goodreturns.co.nz/article/976517265/anz-eases-servicing-tes…

by lucenera | 24th Feb 22, 2:48pm 1645667290

uhm.. if that's true it means that they are considering only a 1%-ish more than their current rate.

That doesn't look reassuring, and even more subject of quick changes based on evolving OCR.

I guess my expectations are correct then?

by Carlos67 | 24th Feb 22, 12:14pm 1645658095

I think we will find that house prices will be pretty sticky on the way down. There are so many variables in play now its hard to make a call so I moved the goalposts to just Tauranga having single digit gains this year. LOL

by PitU | 24th Feb 22, 12:20pm 1645658453

Yes 'very sticky' as people 'want' to be paying the ludicrous prices :P

Free falling... Look at the Tesla chart. Very much reminds me of last housing boom 5 years ago and the current one (zoom out to 5 years and look at the past 2-3 years): https://www.tradingview.com/symbols/NASDAQ-TSLA/ 

by The Person | 24th Feb 22, 12:29pm 1645658989

P/E still 170 long way down to match Toyotas P/E of 10

by WhiskeyJack | 24th Feb 22, 2:41pm 1645666880

Tesla does a lot more than just make cars though. They are developing technologies most people haven't even dreamt of yet.

by the Joneses | 24th Feb 22, 7:30pm 1645684250

Like what? Full self driving cars by 2018, 1 million driverless taxis by 2020, the electric semi truck by 2019, the cyber truck by 2021, all products which you still can't buy. Musk simply makes wild promises like the monorail guy in the simpsons, tricking investors out of their money. He seems to tell lies as big as Elizabeth Holmes, yet somehow gets away with it.

by The Person | 4th Mar 22, 3:07pm 1646359641

Agree, except with your Elizabeth Holmes comparison. He does occasionally deliver a promise or two, enough to keep investors happy and keep the company out of bankruptcy. Like the model 3/Y, if he hadn't delivered that (even late and at higher cost) then they would have been bankrupt a few months later.

by Independent_Observer | 24th Feb 22, 12:42pm 1645659773

Sticky in nominal or real terms? 😜

by HouseMouse | 24th Feb 22, 1:08pm 1645661297

Good lad.

So who does that leave, CWBW and Ashley C. (Maybe they are one and the same?)

Oh, and Luke83 just below

by WellingtonInvestor | 24th Feb 22, 2:57pm 1645667853

It seems to be like a dutch auction at the moment on many properties that failed to sell at tender and now have an asking price. Every few weeks the asking price is dropped 20-30k

by EdwardD | 24th Feb 22, 3:54pm 1645671276

I agree. I have watched 5 propeties now and 2 were being sold by auction (they didn't sell, so are now by negotiation). The other 3 were being sold by negotiation and have since been priced. It is time realtors stopped playing games and simply priced properties.

by RickStrauss | 24th Feb 22, 4:49pm 1645674580

It's been amazing to see how antsy they got at the fact people could use tools to see their prices on TradeMe, while all the time some had been off on Homes trying to push up perceived values of houses willy-nilly. Some seem very allergic to any transparency.

by WellingtonInvestor | 24th Feb 22, 4:58pm 1645675089

All you need to do is order properties by price on trademe, and you can get an idea of what the agent has entered into the 'expected sale price' field by looking at the property above and below that has a price on it. So no special tools are needed, as trademe allows people to see this already. I think other property websites allow the same thing. However some agents seem to list lower amounts in that field to get a listing to people in searches for lessor amounts. IMO agents should be entering their true expected sale price.

by RickStrauss | 25th Feb 22, 3:40pm 1645756843

Yeah, it's really just added convenience to get their exact prices entered. So they shouldn't be objecting so much.

by Luke83 | 24th Feb 22, 12:25pm 1645658744

Should be some good buys in there for me. Going to be a good 2022, still think 5/10% increase by years end once everyone settles down. If I'm wrong then 2 years time I'll be right haha

by Brock Landers | 24th Feb 22, 12:34pm 1645659250

[Narrator] Two years later... he still wasn't right...

by tomjones_04 | 24th Feb 22, 12:46pm 1645659974

I wonder if old mate will look back on his comments in a couple of years and realise what a parasitic douche bag he was.

by RickStrauss | 24th Feb 22, 3:40pm 1645670433

You're not going to be betting money on that emergence of self-awareness, I hope.

by CWBW | 24th Feb 22, 12:42pm 1645659736

Even if their Serious Saver account rises to to 0.70%, savers are still in deep negative interest rates.

May be better to invest the money elsewhere.

by Independent_Observer | 24th Feb 22, 12:44pm 1645659867

Serious saver better than serious shit via excess mortgage debt debt coupled to rising rates.

by Dgm | 24th Feb 22, 1:06pm 1645661183

Bigger hole in someone's pocket...

by fortunr | 24th Feb 22, 1:12pm 1645661551

ANZ's Standard floating rate will go from 5.04% to around 7% by mid next year.

by Notgreedykiwi | 24th Feb 22, 1:38pm 1645663105

I can't see the full table with rates. Is it only me or others have the same issue?

by jasonnn | 24th Feb 22, 2:40pm 1645666801

These are called "test rates". ANZ was down at 5.8% last time I checked. A few years ago they were at 7%.

Last I heard, they were still at 5.8%, but might have increased lately.

They aren't fully public, but if you search hard enough you can usually find them.

This article from a while ago notes that it decreased to 5.8%.

https://www.goodreturns.co.nz/article/976517265/anz-eases-servicing-tes…

by WellingtonInvestor | 24th Feb 22, 2:58pm 1645667927

5.8 seems very low. Then we have to factor in very high inflation on borrowers expenses

by Fitzgerald | 25th Feb 22, 6:28am 1645723703

RBNZ released a statement on test rates in November last year.

They said: "The weighted average test rate across the industry is just over 6 percent."

Which means there are a lot of mortgages that have been tested at under 6 percent. If inflation keeps up, it won't be long until we get to see just how robust the "tests" were.

I know a few people who took advice from their mortgage brokers and told the bank that they had a boarder when they didn't. Might be a real boarder shortage soon. Bet that liar loans are very very common.

by hum | 24th Feb 22, 2:46pm 1645667175

There is still room for upward rate valuation.