Source: Radio New Zealand
ANZ says the increases in fixed rates are a response to recent rises in wholesale interest rates. RNZ / Marika Khabazi
ANZ has become the latest bank to lift home loan interest rates – as the Reserve Bank moves to push back on markets pricing in increases.
The country’s biggest bank said it was lifting its 18-month and two-year fixed home loan rates by 20 basis points.
Its three-, four- and five-year rates will rise by 30 basis points.
It will also cut its six-month rate by 10bps.
ANZ managing director for personal banking Grant Knuckey said the increases in fixed rates were a response to recent rises in wholesale interest rates.
“Since our last fixed rate reduction on October 17, wholesale interest rates have risen significantly, increasing by 33 to 77 basis points for terms 12 months and longer.”
Although the Reserve Bank cut the official cash rate at the last review, it made it clear it did not think another cut was likely.
Markets had previously almost completely priced in another cut to come, and had to reverse that position.
In a statement from the Reserve Bank, Governor Anna Breman pushed back against the market movements.
She said the forward path for the OCR published in the November MPS indicated a slight probability of another rate cut in the near term.
“However, if economic conditions evolve as expected the OCR is likely to remain at its current level of 2.25 per cent for some time.
“Financial market conditions have tightened since the November decision, beyond what is implied by our central projection for the OCR,” she said.
“As always, we are closely monitoring wholesale market interest rates and their effect on households and businesses.
“Ahead of our next OCR decision in February, we will continue to assess incoming data, financial conditions, and global developments, and implications for New Zealand’s economic outlook and our medium-term inflation objective.”
Breman reiterated that monetary policy was not on a preset course. “This is why the MPC meets seven times a year to assess the latest economic conditions and forecasts.”
Simplicity chief economist Shamubeel Eaqub said it was hard for borrowers to work out what to do.
“It creates great urgency just as people are preparing to knock of for the summer.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
