Westpac will be lifting some of its fixed rate mortgages at the end of next week.
The bank says the move is being forced on it by increasing wholesale rates that "have increased significantly over the last four weeks".
Westpac has also advised its current one-year fixed rate special of 4.94% will end on 30 June. The rate will then revert to 5.19%.
Also effective from 1 July, Westpac’s two-year fixed rate will increase to 5.50% from 5.45% and the five-year rate will lift to 6.35% from 6.25%.
Westpac says current pre-increase rates can be rate locked by customers for up to 60 days.
Wholesale rate rises have been especially noticeable at the longer end, of three, four and five year terms.
At the same time, credit spreads have been rising for Australasian borrowers.
These wholesale interest rate moves follow comments by the US Fed about its plans to wind back its quantitative easing (QE) programmes.
In the past week, BNZ removed it's one year Classic special, and Kiwibank increased its 4 and 5 year fixed mortgage rates.
No chart with that title exists.
3 Comments
Begs the question that regardless of housing bubbles, a relatively high $NZ or RBNZ intervention the banks will dictate interest rate rises anyway... Will fixed rates now head above floating?
And if rates rise - how far and for how long?
I'm on a discounted floating rate so i'm keen to hear anyone's thoughts?
The latest fixed mortgage rate rises are driven by the recent rises in wholesale swap rates - up significantly this week. I think there's been an article or 2 on that in the last few days.
Whether fixed mortgage rates rise further or go back to sub 5's will really depend on our swap rates and their direction. Remember that we saw this scenario start to play out last year, and then Europe fell to bits (a bit further) and wholesale rates fell again. Could easily happen again.
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.