Kiwibank's rates follow Aust banks

Last updated 06:53 23/12/2013

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Kiwibank has followed the lead of ANZ and Westpac and hiked its mortgage rates, blaming the rises on higher funding costs.

Effective today, the state-owned bank's one-year fixed home loan rate rose 20 basis points to 5.45 per cent and its two-year rate rose 30 basis points to 5.95 per cent.

Borrowers with less than 20 per cent equity will have to pay 6.29 per cent for the same two-year loan.

Kiwibank's move follows similar hikes from ANZ and Westpac last week.

ANZ lifted all its fixed mortgage rates for both low-equity and regular borrowers by nine to 34 basis points, and withdrew an existing special deal.

Westpac lifted all but one of its fixed rates.

Over the past month, the swap rates that the banks partly base their home-loan pricing on have risen by roughly 20 to 30 basis points.

In good news for savers, the higher rates have also pushed up the amount the banks are willing to pay on term deposits.

Kiwibank increased some of its term deposit rates by 25-30 basis points, while ANZ increased some of its rates by 10-25 basis points.

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- © Fairfax NZ News

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