Special advisory:

Westpac have said their three aggressive fixed home loan rate specials will be ending soon.

The current 1, 3 and 5 year fixed rate specials (<80% LVR & new lending of >$100k) will finish at the end of next week on Sunday, March 3.

These 'special' rates for the 1, 3 and 5 year terms are 4.89%, 5.39% and 5.75%.

Their standard 1, 3 and 5 year rates of 5.25%, 5.90% & 5.99% will remain unchanged.

Westpac introduced the three 'special' rates on Monday, February 11.

All current mortage rates on offer in New Zealand are here »

This notice comes as wholesale rates continue their creep up, affecting the 3 and 5 year terms especially.

Banks are keen to sign homeowners into longer-term fixed rate contracts because customers on variable or short-term rates are vulnerable to poaching by their rivals.

But with the rate curve steepening - that is, with longer term rates rising faster than short-term ones - the attractiveness of banks' offers to encourage fixing for extended terms diminish.

Homeowners however have been rushing to fix and lock in rates before expected future rises.

To a large extent it is self-fulfilling that rates rise if enough borrowers do switch because wholesale markets react to the pressure. Late movers don't gain the advantage early movers get.

In addition, booming property prices in many big urban markets also raise the chance the Reserve Bank may need to raise official rates.

Market observers generally expect an OCR rise later in 2013 or early 2014, 'encouraged' in this view by recent comments by the Reserve Bank governor.

A rise in the OCR generally flows through to rises in floating and short-term fixed rates. Short-term fixed rates can rise earlier than official rate hikes if money markets start pricing in the expectation.

-----------------------------------------------------------------------------------------------------------
Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »
-----------------------------------------------------------------------------------------------------------