Mortgage interest rates: Big step up predicted

These rates are still low by past standards, but a large proportional increase from existing levels.

The major trading banks have already started increasing interest rates since the Reserve Bank’s lifting of the official cash rate (OCR) this week by 0.25% to 0.50%. A clear indication it would have been increased in mid-August had it not been for Covid lockdowns.

ANZ, the country’s largest bank, will increase its floating and flexi home loans by 0.15% from October 12 for new loans and from October 26 for existing loans.

Kiwibank says it will pass on the full 0.25% OCR increase to mortgage borrowers, although it has pointed out its rates are still below other major banks.