14 lenders increase short-term rates

After two weeks with no mortgage rate changes, there has been a sudden step-change with 14 lenders increasing their short-term rates over the last 10 days.  

Monday, May 17th 2010, 5:27PM

Westpac, Wairarapa Building Society, BNZ, PSIS, Kiwibank, AMP, SBS Bank, ASB Bank, BankDirect, NZ Home Loans, Sovereign and HBS all increased their short-term rates ranging from six months to two years.

Interestingly, National Bank and ANZ made the largest increases to their short-term rates after the last Mortgage Rates Weekly newsletter and then cut them all again last Friday, National Bank by 10 basis points and ANZ cutting its one and two-year rates to meet the medians for the major banks of 6.35% and 7.30% respectively as well as reducing its 18-month rate by 16 basis points to 6.69%.

Also in a surprise move last Friday, ASB Bank, BankDirect, Sovereign and NZ Home Loans cut their six-month fixed rates by 15 basis points in a week that saw other lenders increasing the same rate by anywhere between 10 and 30 points.

The other changes these four lenders made included a 10 basis point increase to their one-year rates, a 25 basis point increase to 18-month rates and their two-year rates rose 20 basis points.

In news, two banks have had a rap on the knuckles and repaid $0.8 million in overcharged break fees on fixed-term loans following complaints after the sharp drop in interest rates in late 2008 and early 2009.

We look at Thursday's Budget which economists believe will be supportive of monetary policy and we also have the views of economists on Bollard's latest speech, the Household Labour Force Survey and the ongoing European Sovereign debt saga.

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