ANZ will follow Kiwibank in raising its floating home loan rates in response to the Reserve Bank Te Pūtea Matua increasing the official cash rate.
On Wednesday, the Reserve Bank increased the official cash rate (OCR) by 50 basis points to 3%, prompting Kiwibank to say it would pass on the full increase to its online call savings account and variable mortgage customers.
Now, ANZ says it will lift the rate on its floating rate home loan by 50 basis points to 6.84%, and the rate on its flexible home loan to 6.95%.
It would also lift the rate on its discounted Blueprint to build loan to 4.08%.
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Like Kiwibank, ANZ said it would not be increasing the interest rates on its fixed rate home loans.
About 90% of ANZ home loan balances were on fixed rates, said Ben Kelleher, ANZ managing director for personal banking.
“There is no change to ANZ fixed home loan rates at this time,” he said.
Kelleher said the Reserve Bank was signalling further OCR increases in a bid to cool the economy.
Rising home loan rates have contributed to a cost of living crisis, and on Thursday, Kiwibank chief executive Steve Jurkovich said he was convinced higher mortgage rates were going to take the wind out of the economy’s sails faster than people realised.
But Kelleher said: “Mainstream banks assess affordability at a higher interest rate to take into account possible rate rises over the term of the loan.”
“Our customer data shows people are continuing to pay down debt where they can and keeping up their savings habits. More than a third are ahead on their home loans by six months or more,” he said.
Kelleher said interest rates had moved significantly over the past year and high inflation had caused the cost of living to rise.
He said ANZ would also lift the interest it paid to savers with money in its Serious Saver account, the bank’s largest savings product, by 50 basis points to 2.30%.