All the banks have now hiked short-term rates

All of the major banks have now lifted their short term mortgage rates with Westpac and BNZ the last two to make changes following the Official Cash Rate (OCR) hike of 25 basis points to 2.75% earlier this month.

Wednesday, June 23rd 2010, 3:13PM

by Jenha White

BNZ raised its floating rates across all its products this morning by 25 basis points with its TotalMoney rate of 5.84% now the lowest bank floating rate.

BNZ also increased its six-month rates by 20 basis points, its 18-month rates went up by 16 basis points and its one and two-year rates rose 14 and 10 basis points respectively.

Westpac increased both its floating home loan product rates and its capped one-year fixed rate by 20 basis points last night. This now makes its standard floating rate the highest offered by a bank at 6.49%. However Westpac says its choices everyday floating rate is most popular and it has increased to 5.85%.

Kiwibank launched a capped floating rate option today priced at 6.50% for one year and it also raised its short term rates.

It increased its floating and revolving credit rates by 25 basis points to 5.90% which is still below the floating rate median for the major banks of 5.99%.

Its six-month rate was hiked by 11 basis points to 6.10% and its one-year rate by 10 basis points to 6.45%.

ANZ National Bank raised its floating rates last Friday with ANZ's increasing by 26 basis points to 5.95% and with National adding 24 basis points to its floating rate to bring it to 5.99%.

ANZ National also hiked its six month and one year rates by 10 basis points.

ASB, was the first bank to break ranks and initiate hikes, upping its floating and six-month rates by 25 basis points to 6.00% and 6.10% respectively. It also increased its one-year rate by 10 basis points to 6.45%.

Normally floating rates move in lock step with OCR changes but this time it took a week long stand-off for a change to be made with ASB taking the first plunge.

Anticipation of the negative press the Australian banks took when they started raising rates influenced the stand-off.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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