Chris McKeen/Stuff
Kiwibank has lifted its floating rate home loans.
Kiwibank has raised its variable mortgage rates for new loans from 7.75% to 8.25%.
It has also increased the rate on new revolving credit home loan from 7.8% to 8.3%, with the rises applying to existing loans from May 8.
A revolving credit variable rate loan allows borrowers to re-borrow money they pay off their loan, while Kiwibank’s ordinary varaible rate loans have fixed repayment schedules.
Kiwibank has also edged up some deposit rates, narrowing the gap between the rates it pays depositors and the rate at which their money is losing spending power.
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The rate on its 90-day notice saver has risen from 4.75% to 5.1%, and the rate on its 32-day notice saver has gone up from 4.05% to 4.55%.
The bank has also increased rates on its online call, PIE call, and business online call accounts from 3.85% to 4.35%.
The Reserve Bank Te Pūtea Matua raised the official cash rate (OCR) from 4.75% to 5.25% on April 5 as part of its continued bid to bring down inflation.
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The rising OCR has seen bank home loan rates rise, squeezing indebted households’ ability to spend.
Kiwibank lifted the rates on its fixed-rate home loans on April 18.
There may not be much further for the OCR to rise, economists have said.
Last week official figures showed a drop in the rate of inflation, which was likely to mean the OCR was near its peak, economists said.
Inflation at 6.7% in the three months to March was significantly lower than the market, and Reserve Bank, predicted.
Annual inflation has plummeted to 6.7%, after prices rose only 1.2% in the three months to the end of March.
The Reserve Bank had been expecting annual inflation to rise to 7.3%, from 7.2% in the December quarter.
The drop in inflation was entirely due to the influence of imported inflation, including fuel prices, economists said.
Kiwibank’s variable loan rate increase followed many other banks having made similar moves.
ASB had moved its rate recently to 8.39% to bring it into line with ANZ and Westpac, which lifted their rates earlier this month after the OCR hike.
TSB has lifted its variable rate to 9.19%, but charges 8.39% for borrowers with at least 20% equity.
SBS lifted its rate to 8.49%.
Bank of New Zealand, which mortgage advisers said had been working hard to increase its market share, was still charging 7.74% for its variable rate home loans.
Increasing home loan rates are being blamed for a rise in households falling into arrears on their home loans.
At the end of February, there were 18,900 mortgages on which borrowers had missed payments, up from 18,400 the previous month.
Source: stuff.co.nz