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BNZ has become the latest bank to increase fixed mortgage rates, following moves in the last week by Kiwibank, Westpac, TSB and National Bank.

BNZ raised its one year Standard and Fly Buys mortgage rate by 26 basis points (bps) to 6.25%. It also raised its one year Global Plus mortgage rate to 6.35%.

See and compare all mortgage rates here.

The latest round of fixed mortgage rate hikes has come on the back of increased expectations for hikes in the Official Cash Rate just before or around the middle of 2010. Meanwhile, variable mortgage rates have remained on hold, and are likely to do so until around the time the Reserve Bank starts raising the OCR.

With low variable rates, and rising fixed rates, the mortgage rate market in New Zealand has seen a return to a ‘positive’ rate curve. This means variable and short term fixed rates are below longer term fixed rates, and is the opposite to what was seen over much of the last decade.

The return to a positive rate curve has meant more borrowers have recently been opting for variable or shorter term rates, rather than locking in for longer terms. In turn, this has given the Reserve Bank of New Zealand’s monetary policy much more potency because the OCR has a much quicker and stronger influence on shorter term rates than longer term.

Tags: BNZ, Interest Rates, Kiwibank, Mortgage rates, TSB, Westpac

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This entry was posted on Wednesday, December 23rd, 2009 at 9:21 am and is filed under Mortgage rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.