Both ANZ and the National Bank have now raised their long term fixed mortgage rates, following recent rate rises by ASB, BankDirect and Sovereign.

Basically, rates for fixed terms of 2 to 5 years have risen between 0.20% and 0.50%.

A short-term gap has opened up between the institutions that have moved, and those that are yet to move. There is currently a rate advantage with BNZ, Kiwibank, and Westpac. It is unlikely to last very long, given previous patterns of rate changes.

However, the timing and amount of these increases does raise a question about what is driving them.

It does not appear to be local wholesale market rate movements.

Subscribers to our free "just the facts" service have access to special charts that track bank mortgage rate averages with both wholesale swap rates, and with benchmark government bond rates.

Regular users can see these wholesale rates and benchmark rates charted here and here.

These perspectives clearly show that, to date, there has been no - that is zero - pressure to raise rates emanating from the local wholesale money markets.

More likely, the pressure has come from the margin cost of offshore fund raising the banks have been doing recently. However, those costs will fall unevenly on the banks that have done this type of funding and capital-raising. Margins for access to this foreign funding have varied between banks, and there is now the added cost of the government guarantee where it has been used. These margins and costs will pressure some banks more than others to raise the cost of their lending.

Another pressure on bank profits is the recent moves by the Australian-owned ones to let go of juicy dishonour and honour fees. These concessions will have a noticeable effect on bank's bottom-lines, and general pressure will be on to mitigate the impact of the fee rollbacks.

The latest mortgage rates for all institutions are listed here >>