Major New Zealand Bank Raises Mortgage Rates, One-Year Term Deposits | 1 NEWS

The worm could turn to historically low mortgage rates, with ASB announcing an increase in its fixed-term offers this morning.

Mortgage terms from six months to five years all increase by 0.30 or 0.36 per cent.

Its floating rates remain the same for the time being.

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New Zealand’s second-largest mortgage lender, ASB, has taken the surprising decision to raise interest and term deposit rates across the board. Source: 1 NEWS

“The New Zealand economy is proving to be robust and the economic outlook has improved. While interest rates are rising now, they remain at historically low levels, ”said Craig Sims ASB, executive managing director of retail banking.

“We realize that some first-time homebuyers in particular have never experienced the current low interest rate environment. When we assess a home loan application, we use a “test rate” that is significantly higher than current mortgage rates to give customers the confidence that they can continue to make payments if rates rise. ”

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A rise in inflation and interest rates could put many homeowners at risk. Source: Seven Sharp

The bank also raised its one-year deposit rate to 1%.

Earlier this month, Chris Tivez-Brown, senior economist at ASB, said borrowers should prepare for higher mortgage rates.

“Our forecast suggests that more mortgage rate hikes are coming over the remainder of the year,” he told Stuff.

“ASB now expects the Reserve Bank of New Zealand to start raising the official exchange rate from its record high of 0.25% in November 2021.”

The Reserve Bank (RBNZ) kept the official exchange rate (OCR) at an all-time high of 0.25% this afternoon, and said it will maintain the cheap money lending program for banks .

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