Major lender lifts most fixed mortgage rates but keeps sharp one‑year deal
BNZ has become the latest major bank to lift home loan rates in response to rising wholesale funding costs.
The bank has increased fixed mortgage rates across terms of 18 months and longer, following Westpac’s move earlier in the week, but kept its popular one‑year special unchanged, Stuff and interest.co.nz reported.
BNZ sharpens position on shorter fixed terms
BNZ’s standard 18‑month fixed rate has risen 5 basis points to 4.69%, while its two‑year rate has lifted 20 basis points to 4.89%. The three‑year rate has moved to 5.29%, up 30 basis points, the four‑year rate to 5.49%, also up 30 basis points, and the five‑year rate to 5.69%, after a 40-basis-point increase. The bank’s six‑month and one‑year fixed rates remain at 4.49%.
Interest.co.nz notes that BNZ’s one‑year rate is now matching Kiwibank and sits below Westpac’s recently increased one‑year offer, giving BNZ a competitive edge at that term. Its 18‑month rate also remains “at a very competitive level among the major banks”, while the two‑year rate, although higher, is still around 30 basis points below Westpac’s new two‑year level and in line with ANZ and Kiwibank.
Wholesale funding costs drive latest round of rises
BNZ did not provide commentary alongside its rate announcement, but the timing closely mirrors Westpac’s explanation that longer‑dated funding has become more expensive.
Sarah Hearn, Westpac NZ’s managing director of product, sustainability and marketing, said this week that longer‑term wholesale rates “have increased significantly in recent weeks, driving up funding costs for lenders”.
Those shifts come despite the Reserve Bank holding the official cash rate at 2.25% at its February meeting. The central bank opted to wait, even as annual inflation edged out of its 1%–3% target band to 3.1%.
The next OCR decision, due on 8 April, will be closely watched by advisers and lenders as they reassess where fixed and variable mortgage rates may head next.
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