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Two banks will increase the interest rates on their floating home loans while increasing the amount of interest they will pay to savers.
While a third bank said it would keep its key loan
interest rate for small business borrower stable until the end of the year and keep his floating mortgage rate on hold for now.
The announcements came just minutes after the Reserve Bank raised the official cash rate from 0.25% to 0.5% in a widely expected move.
ANZ New Zealand immediately announced that it would pass on part of the rate hike by increasing its floating and flexi mortgage rates by 0.15% from October 12 for new loans and October 26 for existing loans.
Ben Kelleher, general manager of personal banking at ANZ NZ, said the bank is committed to supporting people in their homeownership aspirations.
“This rate change balances that with the increase in OCR and our wholesale funding costs.”
Kelleher said rates were still low by historical standards.
“Interest charges are still relatively low, and we encourage clients to take the opportunity to pay off as much debt as they can. “
ANZ would also increase interest rates on a number of savings and calling accounts, including online accounts from October 12 and its serious savings accounts from November 1.
Kiwibank said it would pass the entire 25 basis point hike on to variable rate borrowers, including floating home loans.
Nicole Pervan, chief product officer of Kiwibank, said that even with the increase, its rates remained well below those of the big banks after a sharp drop in June of last year that saw it cut by 100 percentage points. base its variable loans to housing and businesses.
“We challenged the market last year by drastically lowering our variable rates and despite today’s OCR hike, we are still far below all of the major Australian banks, underscoring our commitment to help Kiwi achieve. meet their homeownership goals. “
Kiwibank will also increase a range of savings and term deposit rates.
“We know that the low interest rate environment has been difficult for some clients who rely on the performance of their savings, so we hope this is good news for them,” Pervan said.
The rate on his Notice Saver 90 Day account would drop from 1 percent to 1.25 percent. Its term deposit rates will increase from October 8 and from October 11 for other savings accounts.
Meanwhile, ASB said it will keep its most common small business loan interest rate until the end of the year and keep its variable mortgage rate unchanged at 4.45%.
Instead, ASB will pass the full increase in OCR on to customers with Savings Plus and Headstart savings accounts, bringing the maximum interest rate on both accounts to 0.40%.
Tim Deane, executive director of business banking at ASB, said he is keenly aware that small business owners across the country are doing tough things right now and that every little financial relief has helped them get through. make it out.
“Although the increase in OCR puts pressure on our financing costs, we will not pass this cost on to our commercial base rate which is used to rate the loans most commonly used by our small business clients. We hope that this commitment will bring a little peace of mind to small businesses in these very uncertain times. “
Most mortgage borrowers have fixed term rates, which means variable rate hikes won’t have a widespread impact. Fixed-term rates have already risen in recent months due to the anticipated rise in OCR.
Jose George, chief executive of Canstar, said the increase in OCR was likely the start of a series of upward moves.
“While today’s hike has already been factored into retail mortgage rates, further increases are expected. This will cause pain for some Kiwis.”
He said many first-time homebuyers would have borrowed at very low rates in a fairly relaxed lending environment, only to buy in a sky-high market.
“As the cost of borrowing and living increases, reality bites.
“The rate hikes will also hurt small business owners, who are already suffering from the effects of the pandemic. Many of them would have financed their businesses on the backs of residential assets, and they will find themselves between rising costs and an uncertain future. “
After years of cheap money, the pressure is mounting. It will be time for all of us to check our spending and see where we can save some money for pain relief.