Home youth program budget ASB raises fixed mortgage rates

ASB raises fixed mortgage rates


ASB Bank broke ranks from other major real estate lenders and increased its fixed mortgage rates across the board.

ASB raised the fixed rates on mortgage loans and slightly increased some rates on term deposits.
Photo: RNZ / Dom Thomas

The country’s second-largest mortgage lender has raised fixed mortgage rates by 30 to 36 basis points (0.3 to 0.36%), including one- and two-year fixed rates, which are most popular with buyers of housing.

ASB’s executive retail banking chief executive Craig Sims said the economy was robust and the economic outlook had improved.

“While interest rates are rising now, they remain at historically low levels.”

“We recognize that some particular first-time homebuyers have only experienced the current low interest rate environment. When we assess a home loan application, we use a ‘test rate’ that is significantly higher than current mortgage rates to give customers the confidence they can continue to make payments if rates rise, ”he said. declared.

ASB raised some of its term deposit rates by a more limited amount from 10 to 25 basis points.

Kiwibank also raised some rates this morning.

Over the past two months, some lenders have sought market share with conditional and special short-term loan offers, but longer-term fixed-term loans have also been on the rise recently, reflecting rising interest rates. wholesale in New Zealand and around the world.

The retail rate hike follows growing evidence that inflationary pressures are accelerating, which in turn has pushed up wholesale interest rates in anticipation that the Reserve Bank (RBNZ) will be forced to shut down to its easy monetary policies and to increase its official spot rate (OCR) sooner rather than later.

RBNZ’s policies of buying bonds, making cheap funds available to businesses and banks, and cutting OCR to a record low of 0.25%, have combined to keep rates under control interest during the past year in order to cushion the economic impact of the pandemic.

The RBNZ has so far viewed the high inflation as largely temporary, caused by factors such as supply chain disruptions, labor shortages and higher fuel costs.

He has previously said he is prepared to let inflation slightly exceed its 2% target, while also seeking to ensure the labor market has recovered.

The central bank is not expected to change policy or OCR in its latest monetary review this afternoon, economists are increasingly opting for a hike in November this year and certainly no later than February next year .