Westpac, one of New Zealand’s major banks, has followed Kiwibank and BNZ in raising its mortgage rates this week. The move comes as banks respond to elevated and volatile wholesale rates, which they use to fund their home lending.
Starting tomorrow, Westpac will increase its standard rates for its two-year and four-year mortgages to 7.59% and 7.19% respectively, a rise of 10 basis points. The 18-month and five-year standard home loan rates will also see an increase of 14 basis points to 7.69% and 6.99% respectively.
The decision by Westpac reflects the challenges presented by higher wholesale rates, which have prompted these rate hikes. It is important to note that these rate increases could add to the burden for homeowners who are already dealing with rising living costs. To address this concern, Westpac has assured customers that it is working closely with them to provide support and help manage any financial difficulties they may be facing.
In addition to the mortgage rate hikes, Westpac has also raised its nine-month deposit rate to 6%, the highest among its competitors. This move suggests that the bank is looking to attract more savings to help fund its lending activities.
Kiwibank, on the other hand, became the first major bank to raise both its mortgage and deposit rates earlier this week. The bank increased its rates for one-year and two-year mortgages to 8.15% and 7.99% respectively. Additionally, the two-year special rate for borrowers with more than 20% equity rose to 6.99%.
BNZ, following suit, raised its fixed classic and standard mortgage rates for an 18-month and two-year period. The classic rate increased to 7.09% for 18 months and 6.99% for two years, while the standard rate rose to 7.69% for 18 months and 7.59% for two years.
These rate increases by several major banks in New Zealand indicate a shifting landscape for borrowers. With elevated wholesale rates and improved economic performance, banks are adjusting their lending rates in response. This could impact homeowners who need to refinance their mortgages or potential homebuyers who may face higher borrowing costs.
It is essential for homeowners and individuals seeking mortgages to stay informed about these rate changes and closely assess their financial situations. Seeking guidance from banks and financial advisors can help borrowers understand their options and navigate through this evolving lending environment.