However, the bank is raising its variable home loan rate from 3.4 per cent to 3.75 per cent
As the big four New Zealand banks raised their home loan rates this week, Kiwibank will drop its two-year rate.
Kiwibank announced today its two-year fixed home loan rate will drop six basis points to 2.49 per cent per annum.
However, the bank is raising its variable home loan rate from 3.4 per cent to 3.75 per cent.
Kiwibank’s move came after a surprise jump in inflation to an annual rate of 3.3 per cent, strengthening expectations the Reserve Bank will raise the official cash rate (OCR) to 0.5 per cent next month.
The Reserve Bank held the OCR at 0.25 per cent when it released its monetary policy review on Wednesday.
Steve Jurkovich, Kiwibank chief executive, said in the rising rate environment the bank was providing certainty to its customers. As a challenger we are providing Kiwis with a real alternative to the Australian-owned banks.
In response to rising inflation, ASB was the first to act earlier this week, lifting its fixed one-year rate from 2.19 per cent to 2.55 per cent per annum. Its two-year rate also rose from 2.59 per cent to 2.95 per cent.
ANZ, BNZ and Westpac followed suit today, announcing an end to the downward trend in interest rates.
An ANZ spokeswoman said it had raised its home loan rates in response to a number of market factors, with a key one being progressive increases in wholesale interest rates.
The bank’s standard and Flybuys loans rose more sharply, with a one-year fixed term mortgage rate now at 3.15 per cent and a five-year mortgage hitting 4.59 per cent.
ANZ lifted its one-year rate by 31 basis points to 2.5 per cent, its two-year rate by 31 basis points to 2.9 per cent and its three-year rate by 25 basis points to 3.24 per cent.
BNZ increased its one-year rate by 36 basis points to 2.55 per cent, its two-year rate by 40 basis points to 2.95 per cent and its three-year rate by 26 basis points to 3.25 per cent.
Westpac’s one-year rate went up by 36 basis points to 2.55 per cent, its two-year rate by 30 basis points to 2.89 per cent and its three-year rate by 30 basis points to 3.29 per cent.
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