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Westpac hikes 6 mth, 2 yr mortgage rates; leaves variable unchanged
December 15th, 2009Westpac has hiked its six month and two year mortgage rates by 10 and 21 basis points (bps), respectively, but left its variable rates on hold.
Westpac’s new six month mortgage rate is 5.59%, and its new two year rate is 7.2%. The new six month rate is still the lowest offered by the major banks in New Zealand, while Westpac’s new two year rate has moved into the pack of rates offered by other banks. Westpac’s standard variable rate is unchanged at 6.29% and its ‘Choices Everyday’ revolving credit variable rate is at 5.69%.
See and compare all mortgage rates here.
While fixed mortgage rates have been rising in recent weeks, variable rates have remained stationary at the low end of the mortgage rate curve as the Reserve Bank keeps the Official Cash Rate (OCR) at its record low of 2.5%. The OCR has a much stronger influence on variable mortgage rates than on fixed rates, and variable rates are expected to start rising when the Reserve Bank decides to hike the OCR ‘around the middle’ of 2010.
Having variable rates at the low end of the mortgage rate curve has meant many borrowers decided against fixing their mortgage rates for longer terms, instead moving onto variable and very short term fixed rates. This has given the Reserve Bank’s monetary policy more potency in recent months as it means hikes in the OCR will flow through quickly to more borrowers who may have missed chances to lock in low longer term fixed rates.
One basis point is 0.01%.
Tags: Interest Rates, Mortgage rates, OCR, Official Cash Rate, RBNZ, Reserve Bank of New Zealand, Westpac
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December 15th, 2009 at 10:31 am
Mortgage rates going up, deposit rates going down. Hmmm
December 15th, 2009 at 11:57 am
Does anyone know what is happening with the Commerce Commission into early repayment fee calculations? They did clear a couple of banks that were using the safe formula but Westpac and Kiwibank have still not been cleared over 6 months later.
December 15th, 2009 at 12:15 pm
Jeez you don’t want much DS…it’s hard enough waking Diplock up as it is…the usual ‘glidetime rule’ is to let 3 months pass by and then lose the paperwork!
December 15th, 2009 at 5:27 pm
Yeah Wally… the CC were in between a rock and a hard place there. If they said Westpac were wrong, they opened them up to a raft of claims against them and if they cleared Westpac, the other banks would change their calculation formula.