Rising bank funding costs to put upward pressure on mortgage rates: RBNZ
The central bank's latest monetary policy statement (MPS) noted that mortgage rates have dipped slightly for most fixed terms and that rates offered on term deposits longer than six months have also declined.
“The margin between mortgage rates and wholesale interest rates is expected to return to more historically normal level as competition for term deposits continues and funding conditions for banks continue to tighten,” the MPS said.
“This is expected to see mortgage rates hold up relative to wholesale interest rates.”
RBNZ noted that wholesale interest rates have been volatile in recent months with rates of up to two years increasing compared to immediately before its last MPS in November last year, but that rates for terms longer than two years have fallen.
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