Westpac, SBS follow suit and raise mortgage rates

Westpac and SBS Bank have followed ASB, ANZ and National Bank in raising longer term fixed mortgage rates to over 6.5 per cent, despite the Reserve Bank's promise to keep the Official Cash Rate at 2.5 per cent until late next year.

Banks are reacting to a rise in interest rates on wholesale markets and higher rates needed to attract term deposits in New Zealand. The Reserve Bank has been pushing the banks to raise more funds locally to reduce their exposure to a freezing of global financial markets.

Yesterday, an ANZ economist warned that banks were likely to move quickly in raising rates as many borrowers were looking to fix their mortgages before rates rose. Only BNZ out of the big four has yet to move in the latest round of increases, while Kiwibank and TSB have also held out.

To read the full NZ Herald article click here

Posted: 12 Aug 2009

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