Best bank rate review

One bank boss said to me last week before the OCR increase that pricing for floating home loans wasn't tied to the official cash rate. Despite that the bank he works for and every other bank, except Westpac, have increased their rates since the Reserve Bank announcement.

What, possibly, caught people by surprise is that fixed rates have been rising this week too in the back of increased wholesale rates. What's unclear at this stage is if banks are seeing a rush of new business. If this happens they may be forced ot hike rates sufficiently to slow down the volumen of applications.

The one bank to hold its line has been Westpac, however as our yield curve graph shows Westpac was already the most expensive bank notably for longer dated terms.

In the two-year space HSBC has rolled out a special rate of 5.79% which is the best bank rate for this term.  However to qualify a borrower has to be an HSBC Premier customer which requires lending of $500,000 or at least $100,000 in deposit. HSBC says for existing Premier customers this rate is only available if they drawn down a minimum of an extra $100,000.
The next best bank rate in this term is SBS and its subsidiary HBS which is offering 5.90% for loans with a deposit of at least 20%.