Move follows ANZ's rate rise
Westpac has announced that it was increasing a range of its home loan rates.
The bank’s one-year rates increase by six basis points, taking the special rate to 7.25% and the standard rate to 7.85%.
Westpac’s two-, three-, and four-year rates, meanwhile, increase by 20 basis points, putting the special two-year rate at 7.49%, Stuff reported.
Westpac’s home loan rate move followed ANZ, which lifted its longer fixes but trimmed its six-month rate.
The Reserve Bank flagged the OCR to remain steady at 5.5% but was now expecting it to stay there for longer. Its latest forecasts indicated that any rate cuts will come in 2025.
Brad Olsen, Infometrics chief executive, said at the time the increases in longer-term home loan rates were driven by increases in government bonds in the past two weeks, Stuff reported.
“The 10-year NZ Bond rate has increased 46 basis points since the start of August,” Olsen said. International longer-term rates have been rising too, driven by a view emerging that central bank rates will need to stay higher for longer.
“Higher US bond issuance has also pushed up bond yields internationally. Continued stronger-than-expected economic trends both here and overseas has fuelled expectations that global central banks won’t be able to relax as quickly as hoped, and that’s been raising longer-term borrowing costs.
“The increases announced here do appear to be driven by a continued rise in the cost of international borrowing, and also reinforce the view signalled by the Reserve Bank last week that there is a risk that rates need to go higher, and certainly that rates look likely to need to stay higher for longer.
“More generally, the continued pressures on global interest rates show there’s a rising risk that interest rates might still have a bit more to go before they reach a peak – and that this risk is higher than we’d seen previously.”
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