Kiwibank Raises Mortgage Rates | Stuff.co.nz
Kiwibank has raised mortgage rates and expects other banks to follow.
Kiwibank has raised its mortgage rates.
It raised its “special” one-year fixed-rate housing loan rate from 4.55% to 4.85%.
This is a rate for borrowers whose debts are less than 80% of the value of their home.
Kiwibank raised its variable rate mortgage from 5% to 5.5%.
* Bank of New Zealand raises mortgage rates
* Kiwibank and BNZ are following other major banks in raising home loan rates
* Kiwibank says lower floating rates are a good option for first-time home buyers
The move comes as economists predict home loan rates will top 6%, putting a strain on the finances of many households.
Richie McLay, Kiwibank’s Senior Director of Savings and Borrowing, said: “Although we are the first to respond on this occasion, we aim to remain competitive in the market so that our lending and saving customers benefit from a fair deal.
“We know the low interest rate environment has been challenging for some clients who rely on savings returns, the higher term deposit rates on offer provide a lower risk option for stable returns.”
ANZ Chief Economist Sharon Zollner says efforts to rein in inflation will be painful for some Kiwis but are necessary (interviewed April 19)
Kiwibank also raised some of its term deposit rates, with its 90-day term deposit rising from 1.1% to 1.25%.
Deposit rates remain firmly below inflation of 6.9%, eroding the value of retail cash deposits.
The cost of living crisis has become a national political battleground, with National housing spokesman Chris Bishop blaming economic mismanagement for the hit to borrowers as the Reserve Bank struggles to control the ‘inflation.
“The latest Reserve Bank analysis will scare mortgage holders as the central bank predicts the interest rate on one- and two-year mortgages will hit 6% next year,” he said. .
“A household that borrowed $700,000 would face annual interest charges of $42,000, which means they would have to pay over $800 a week before they even started to reduce the actual loan.