The pace of fixed mortgage rate hikes is quickening as banks scramble to cover fast-rising wholesale money costs. Westpac's hike not matched by term deposit rises

Westpac has today (Wednesday) announced fixed mortgage rate increases of between +4 and +20 bps.

These hikes follow those earlier by ANZ, although Westpac have retained their five year 'special'.

Banks have been raising fixed mortgage rates quickly recently as the relentless rise in wholesale rates drives money costs higher.

Today, the wholesale swap rates for terms of 2, 3, and 4 years are up by another +2 or +3 bps. Just in December, that brings the rise in two year swap rates to +17 bps, the rise in three year swap rates to +23 bps, in four year swap rates to +25 bps and in five year swap rates to +32 bps.

ANZ reinforced that with their Monday hike by offering higher term deposit rates as well. But Westpac have not followed that term deposit reaction, yet.

The Westpac mortgage changes are for 2, 3 and 4 year fixed terms.

Their two year 'special' has been increased by +15 bps to 4.54%. This is 5 bps lower than the equivalent ANZ rate but higher than those currently offered by their other main rivals.

Their three year 'special' has been increased by +4 bps to 4.79%.

And their four year standard rate has been raised by +20 bps to 5.49%. This is actually the highest four year rate in the market offered by any bank.

These new Westpac rates are effective Thursday, December 22, 2016.

See all banks' carded, or advertised, home loan rates here.

A snapshot from the key retail banks is:

below 80% LVR  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % %
4.25 4.99 4.59 5.29 5.45 5.60
ASB 4.29 4.45 4.49 4.79 5.19 5.39
4.29 4.99 4.45 4.65 5.29 5.45
Kiwibank 4.24   4.39 4.75 5.30 5.40
Westpac 4.25 4.95 4.54 4.79 5.49 5.39
             
4.39 4.45 4.45 4.79 5.29 5.45
HSBC 4.19 4.19 4.19 4.49 4.79 4.99
HSBC 4.29 4.29 4.39 4.75 5.29 5.45
4.25 4.45 4.49 4.59 4.89 4.99

In addition to the above table, BNZ has a fixed seven year rate of 5.99%.

TSB Bank offers a fixed ten year rate at 5.75%.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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7 Comments

On the flipside, they have also reduced their interest rates for their bonus saving account over the last week or so. If I had purchased an overpriced house in recent years, and had a huge mortgage on it, I would be getting a bit worried that things were beginning to turn.

My 2 year mortgage comes up for renewal in July. I was hoping rates would stay low enough so that I could roll over to a lower rate than my current 4.74%, but that's looking unlikely...

I've noticed banks dropping the on call rates and just wondered if they are trying to "push" people into longer term deposit commitments to solidify there funding costs in these uncertain times.....

yes I think you are right. They want to lock everyone to a 4% long term to prepare for when the variable rates will go to 6 or 8%

wont be long and the 4"s will disappear

Hardly a worry, had a rate of 8.6% for years. If you cannot handle something in the 6's you had better start fixing.

"Westeners only" Bank Westpac are following on with the traditional Aussie Rules "be racist and xenophobic and get away with it"

Bite The Chinese hand that feeds their economy and then get the Major Banks stop them from using their own overseas income to purchase a roof over their heads?

Now they are practicing their Xenophobia in Gods Own New Zealand.